The Difference Between Credit Reports and Credit Scores

Although people often use the terms interchangeably, the truth is a credit report and a credit score are not the same.

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Though they sound similar, credit report and credit score are two important but distinct components of your financial health. Here’s how they differ:

Credit reports

In the United States, there are three major credit reporting agencies: Equifax, TransUnion, and Experian. These companies collect information about you and your credit management habits, then compile that information into credit reports which are sold to others.

You might think of a credit report like a report card. It shows future lenders how you have handled your financial obligations in the past and contains information such as:

  • Your history borrowing money with loans and credit cards
  • Your account balances and payment history
  • Negative information like collection accounts, repossessions, foreclosures, etc.
  • Public records like bankruptcies (formerly tax liens and judgments as well)

Although you may not like the idea of the credit reporting agencies spying on you, you can rest assured that federal law (specifically, the Fair Credit Reporting Act) strictly regulates what the credit reporting agencies can and cannot do with your information. Check out the best credit cards for every type of purchase.

Credit scores

If your credit reports are financial report cards, then your credit scores (you have many of them) might be considered your grades. A credit score is based upon the information found on one of your three credit reports. FICO describes credit scores as a “vital part of [your] credit health.”

Instead of A’s, B’s, and C’s your credit scores can range from 300 to 850. The higher your scores fall on the scale, the better. Here are 11 reassuring ways you can improve your credit score.

Why you should keep an eye on both

It’s important to keep track of both your credit reports and your credit scores. If you don’t, it could cost you money. The Consumer Financial Protection Bureau (CFPB) explains, “Errors on your credit report can reduce your score artificially—which could mean a higher interest rate and less money in your pocket—so it is important to check your credit report and correct any errors well before you apply for a loan.” Read on to find out the sneaky things that can lower your credit score.

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Michelle L. Black
Michelle Black is a credit expert with over 16 years of experience in the industry and a freelance writer. She specializes in credit reporting, credit scoring, financing (mortgages, credit cards, loans), debt eradication, budgeting, saving, and identity theft. Michelle is also the founder of CreditWriter.com and HerCreditMatters.com—a blog aimed at helping women support each other as they take charge of credit, money, family, and parenting issues in a safe, judgment-free space. She holds a Bachelor's of Arts in Spanish and French from Winthrop University. When she isn't writing about credit and money, Michelle enjoys traveling with her family and taking Tae Kwon Do classes with her two young children. She and her son currently hold first-degree black belts and her daughter is scheduled to join them, earning her black belt as well within the year.