It’s important to differentiate between your credit report and your credit score. The differences between the two are subtle, but large enough to discuss.
Credit Reports vs. Credit Scores
Your credit score is a very small part of your credit report. A credit score is a number tabulated based on the data found in your credit report. Credit reports are “logs” of your credit history.
- Credit Scores – A numerical number that “scores” your credit report.
- Credit Report – A report of all credit activity in your life including open accounts, payment history, and all accounts you’ve had within the last seven years.
Which Matters More?
It’s your credit score that matters most. Your credit score is the number that companies might use to decide to hire you, or banks might use to determine whether or not to give you a loan. But you can’t have a credit score without first having something on your credit report. So, in the grand scheme of things, they’re almost one in the same.
Differentiating between the two is important only because we’re soon to start talking about how to get your credit score, as well as your credit report for free! With this information in hand, we’ll be able to make bigger improvements to your credit score by pushing for change on your credit report.
You can’t have a bad credit report and have a good credit score. In the same way, if you have a good credit report then you’ll never have a bad credit score.
Your Three Credit Reports
You actually have more than one credit report and score. There are three main companies – Experian, TransUnion, and Equifax – which keep a credit report and score for you. These “credit bureaus,” as they’re known, all have different methodologies for calculating your score, but they’re all pretty much similar.
In the next few articles, we’ll discuss how you can get your free credit report and score to start making other changes towards a better credit report. Follow allow in our article about how to get your credit report for free.
Photo by: thebusybrain
