The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.
When learning about your credit history, you’ll find it’s usually based on two factors: your credit score, which is a number between 300 and 850 used to grade your creditworthiness, and your credit report, which is a documentation of all the factors that make up your credit score. Learning to check and manage both your credit score and your credit report are important parts of maintaining your overall financial health.
What is a credit score?
Your credit score is a number between 300 and 850 that is used by lenders to grade your creditworthiness, or how good of a candidate you are for an extension of credit (i.e. a loan or credit card).
There are many different scoring models, but the one used most commonly to make credit decisions is the FICO® score. It offers a variety of specialized scores for credit cards, home loans and more. Another relatively common score issuer is VantageScore.
Credit scores are updated monthly and determined based on a variety of factors to predict how likely you are to be a responsible borrower, such as:
- Your history of late and on-time payments
- How long you’ve had your credit accounts
- How much debt you have overall
- The diversity of your credit accounts (across credit cards, mortgages, student loans, etc.)
- How much money you owe compared to your credit limits
- What percentage of your credit limit you’re currently using
- How many new credit cards or loans you’ve applied for recently
All of these things weigh into one personal three-digit number. While scoring models vary, overall, anything above 800 is considered exceptional, the 740–799 range is considered very good and 670–739 is considered good. Any score below 670 could stand to be improved, and scores below 580 are considered very poor and will severely limit a person’s creditworthiness.
What is a credit report?
Your credit report is a documentation of all the historical factors that are used to calculate your credit score, but it doesn’t include the actual three-digit “grade” assigned to you each month. Credit reports list:
- Every account you currently hold
- All of your closed accounts
- All hard inquiries into your credit
- A list of both your late and on-time payments
- A record of any accounts that needed to be sent to a collection agency
There are three credit bureaus that generate credit reports: Experian, TransUnion and Equifax. Annually, you can order one copy of your credit report for free from each bureau. It’s recommended to request these copies one at a time throughout the year and check regularly for any potential errors that could damage your credit and hurt your chances at getting a loan.
Who uses credit scores and who uses credit reports?
When applying for a new line of credit, it’s important to know what your lender will be looking at: your credit score or credit report. Generally, here’s who will be looking at what:
- Both credit report and credit score: Auto lenders, collection agencies, mortgage lenders
- Only credit score: Credit card companies, landlords (occasionally)
- Only credit report: Employers, insurers, landlords
No matter whether your lender will be looking at just your credit report or your credit score, it’s recommended to check both your score and report before applying for new credit. This way, you can examine your overall credit health and see if there are any potential issues in the way of you getting approved, or if applying for a new line of credit is a good idea at all.
Do people know the difference between a credit score and a credit report?
It’s important to be informed on what a credit score and credit report are, as well as how to monitor both and report any discrepancies. But how many people are actually getting this essential financial education?
We surveyed over 3,000 people to learn how many people know the key differences between a credit score and a credit report. Here are some key takeaways we found:
- One in four people don’t know that there is a difference between a credit score and a credit report.
- Less than 20 percent know how to read their credit report.
- Seventy percent of people don’t know how long credit history remains on a credit report.
The first survey question asked whether or not there’s a difference between a credit score and a credit report.
- In a group of over 1,000 respondents, just under 75 percent correctly answered that there is a difference between a credit score and credit report.
- 83 percent of respondents aged 55 and older answered correctly.
- 50 percent of respondents ages 18–24 knew the differences between a credit score and credit report.
The second of the two survey questions quizzed participants on what is and isn’t true of a credit score or a credit report.
- Across both surveys, just over 50 percent of respondents answered a majority of the six total choices incorrectly.
- About 12 percent completed the quiz with one or no mistakes.
How do I access my credit score and credit report?
It’s recommended that you check both your credit report and credit score before applying for new credit, such as a home loan, a new credit card or a student loan. This gives you a chance to see what shape your credit is in and take steps to improve it if necessary.
You can access a free credit report from each of the three national credit bureaus (Experian, Transunion and Equifax) once every 12 months at AnnualCreditReport.com. Once you have your credit reports, carefully check them for accuracy and any factors or accounts that could be hurting your credit score.
Contrary to popular belief, checking your credit scores does not make your score go down. You can access your score each month on a number of different banking websites, including your personal credit card site. Become familiar with your score and look out for any sudden dips that might signal possible negative items.
Whether you need to brush up on the basics of credit or are curious about what differentiates credit scores and reports, taking these steps to secure your financial future is important. Knowing these key differences can help you prepare for a financially healthy future and ensure you have the knowledge and the means to buy a house, take out a student loan or any other situation where your credit is involved.
Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.
Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.
Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.