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The Difference between Credit Report and Credit Score

By Karen Anderson
Published: Wednesday, October 28th, 2009

There are distinctions between credit report and credit score and this is one of the most helpful among credit report tips that you are currently looking for. If you have been a credit card holder for along time, you are probably among those who took information regarding credit report and credit score for a long time. After the impact of financial crisis, more and more people are recognizing the need to be well-informed on how credit cards, loans and mortgages work before they are once again buried unknowingly in debt.

Your credit history will be affected by both your credit report and credit score but they are two different parts of your credit history. They will however have a great effect on your future financial standing. Credit report tips will tell you that a credit report is a record and evaluation of your financial past that contains information on you payment history, record of all your debt and other personal information. Meanwhile, your credit score is a very important number that will denote your financial risk. This only means that you will be scored on how likely are you to pay your debts.

Credit report tips will also tell you that your credit report will be prepared by credit bureaus or credit reporting agencies. There are three national credit bureaus, which are Equifax, Experian, and TransUnion. You will encounter two known types of credit report: single bureau credit report and 3-in-1 credit report. The former will provide information maintained by any of the three credit bureaus while the latter is the most complete and will provide information maintained by all of the three credit bureaus.

There are several things that will be contained in your credit report as mentioned earlier and these are: payment history, length of credit history, recent credit activity, types of credit used, personal information, outstanding debt, current and previous employers, and bankruptcies. Some credit report tips will categorize all these information into three or four groups for a more convenient way of presenting them. These sets of information will mostly come from directly from all the institutions that you have done business with. Your credit report can be accessed by government agencies as much as they can be accessed by prospective lenders, according to the law. It will be used by government agencies to determine if you are qualified for benefits and by a prospective lender to determine your interest rate as well as your creditworthiness.

Now, credit scores will be your credit report translated numerically and they provide prospective lenders a way of assessing if you are creditworthy. Some would simplify the credit score as the credit future being the sum of your credit past and credit present. Any calculation methods can be used to arrive at this certain sum but the FICO is the most popular. The important thing here is that you should aim to have a high credit score because the higher you get, the more creditworthy you become to your lender’s eyes and this will be the core of all credit report tips.

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