What’s The Difference Between Credit Scores and Credit Reports?

Credit scores and credit reports are essential in qualifying for everything from credit cards to apartment rentals and auto lending. However, you may be shocked to find out that there’s a difference between a credit score and a credit report. It all may sound very similar, but the truth is that both your credit scores and credit reports hold two different meanings yet are equally important. Wondering what those differences are? Let’s get right into it!

Credit Scores Vs. Credit Reports

The difference between a credit score and a credit report is that a credit score is a number between 300-850 that’s analyzed and calculated based on your credit history. A credit report has every piece of your credit history information, such as current and historical credit accounts, including the type of credit tradeline (revolving, installment, and open accounts) and your credit activity. 

In short, a credit report contains all of your credit histories, while a credit score is a simple number to summarize everything on your credit report. 

How a Credit Score is Used

A credit score determines whether you qualify for a credit card or mortgage and more! As previously mentioned, a credit score is calculated based on the information in your credit report. Your score can differ depending on which credit reporting agency (TransUnion, Equifax, and Experian) provided the data, the credit scoring model used, the type of loan, and even the day it was calculated. 

Higher scores can signal credit bureaus your excellent loan paying history and make you eligible for lower interest rates. Your score is also an insight to lenders to see if you’re a good or bad risk to lend money to and how likely you are to pay it back. 

To increase your credit score, you can review each piece of your credit report to spot errors and identify areas for improvement. For example, paying your credit tradelines (any credit account established with a lender and appears on your credit report) on time and not taking out more debt than you can handle will help increase your score. 

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How a Credit Report is Used

A credit report is not like a credit score in which a number quickly highlights your creditworthiness; it’s more than that. It’s an important measure of your financial reliability. A credit report is a more in-depth, detailed statement of your credit history, and it does not include your credit score. Your credit report shows lenders your debt amount, what types of credit you use, how long your accounts have been open, and if you’ve had any late payments. It tells lenders how much credit you’ve used, giving lenders a view of your credit history. A credit report also includes your personal information, such as where you live and if you’ve ever filed for bankruptcy or have been sued or arrested.

Credit card companies and lenders use credit reports to evaluate applicants’ probability of paying off their debt on time. Not only that, insurers use credit reports to calculate insurance scores and collection agencies to estimate which accounts a borrower will pay off first. Landlords can also use credit reports to evaluate and determine an appropriate security deposit amount.

One of the best and fastest ways to improve your credit to show lenders that you are creditworthy is adding a rental tradeline from RentReporters. RentReporters will establish a tradeline on your credit report as an installment loan, then report your rent to the credit bureaus on that installment. Doing this can improve your overall credit since we report the past 2 years of payment history, making your credit report even more promising and reliable!

How to Get a Credit Report

You can get a free copy of your credit report from each credit agent once every 12 months from AnnualCreditReport.com.