As you go through your adult life, you may have heard the terms “credit score” and “credit report”, but wondered what they actually mean. While the two terms are similar, they are actually quite different.
So what’s the difference between a credit score vs credit report? Read on to learn more.
Credit score vs credit report
Sometimes the terms credit score and credit report are used interchangeably. While your credit score and credit report can be used to assess your financial health and credit risk, they are essentially different and used in a variety of situations.
Your credit score is more of an average, whereas your credit report is a comprehensive history. Think of your credit score as your GPA and your credit report as a report card. Some lenders may check only your credit score, or only your credit report, or both.
In order to understand the differences between a credit score vs credit report, first, let’s go over exactly what they are.
What is a credit score?
Your credit score is a numeric representation of your credit health. An actual credit score is a three-digit number that gives lenders an idea of your credit and financial history.
The tricky thing about credit scores is that there are many different credit scoring models out there. But one of the most popular models is the FICO score model.
The FICO credit scoring model ranges from 300-850 — the higher your score, the better your credit health.
How is your credit score determined?
Your credit score is largely determined by the data that’s in your credit report.
Although there are many different credit scoring models. the three major credit bureaus (Experian, Equifax, and TransUnion) use two scores: FICO and VantageScore. These credit bureaus manage credit history data for U.S. consumers.
Using the popular FICO scoring model, your credit score is determined by a number of factors. Here are the factors and percentages they take up when determining your overall credit score:
- Payment history (35 percent)
- Amounts owed (30 percent)
- Length of credit history (15 percent)
- Credit mix (10 percent)
- New credit (10 percent)
As you can see, your payment history is the largest contributing factor to your credit score. If you always pay your bills on time, it can help improve your credit. But if you miss payments or become delinquent? It can have an adverse impact on your credit score.
Additionally, amounts owed is another big factor. If you carry high balances or use a big chunk of your available credit, it can hurt your credit score.
How long you’ve had a credit account, the types of credit you have (such as credit cards, student loans, mortgages, etc.) and how much new credit you are applying for all have an impact on your credit score too.
These factors make up your credit score, which shows lenders how much of a risk you are. According to the Experian credit bureau, a “good credit score” is typically in the range of 670-739, and a “very good credit score” is 740-799.
Your credit score is used in a variety of situations, such as applying for student loan refinancing, a credit card, or a mortgage. So while you may not think your credit score is that important, it does affect the approval process as well as your interest rates for future opportunities.
What is a credit report?
While your credit score is a numeric representation of your credit health, your credit report is a much more comprehensive, detail-oriented look at your credit.
Your credit report includes a ton of information about you and your financial life. It includes information such as what types of loans you have, how much you owe, how long your accounts have been open and if you’ve paid bills on time.
Additionally, your credit report includes personal information about you such as where you live, if you’ve filed for bankruptcy, and if you’ve ever been sued or arrested.
The three major credit bureaus manage information related to your credit history. So if you have applied for a new line of credit or missed a payment, it will likely be on your credit report.
You can access your free credit report at AnnualCreditReport.com, which gives you all of your credit reports from the three different credit bureaus. I recently got my free credit report before I moved to make sure everything looked good and there were no mistakes.
I knew that many prospective landlords check your credit and wanted to make sure my report was accurate and that my credit score reflected my positive repayment history. If for some reason there are mistakes on your credit report, follow these instructions.
Utilizing your credit score vs credit report
Your credit score and credit report are similar, but not the same. Both illustrate how well you pay back your debts and how responsible of a borrower you are.
To keep in good standing with your credit report and credit score, make sure to pay your bills on time and keep your balances low.
You also want to periodically check up on your status and see where you stand with your credit score and credit report by checking your information on any of the sites listed above. Good luck, and happy credit-building!
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.57% – 6.98%3||Undergrad & Graduate||Visit SoFi|
|2.47% – 5.87%1||Undergrad & Graduate||Visit Earnest|
|2.47% – 8.03%4||Undergrad & Graduate||Visit Lendkey|
|2.80% – 6.22%2||Undergrad & Graduate||Visit Laurel Road|
|2.48% – 6.25%5||Undergrad & Graduate||Visit CommonBond|
|2.57% – 8.17%6||Undergrad & Graduate||Visit Citizens|