Here's Why Credit Scores and Reports Are Not the Same


Do you know the difference between your credit score and credit report? A surprisingly high number of consumers don't. They use the terms "credit score" and "credit report" interchangeably, not knowing that there's a big difference between the two.

"You can look at a credit report as your report card in school," said Jason van den Brand, chief executive officer of San Francisco-based Lenda, an online mortgage-refinance platform. "You have all this information on it, sort of like the grades you get from all your different teachers. Your credit score is more like your combined grade-point average from all that information."

Your credit report — you actually have three important ones — lists key financial information such as your open credit card accounts, how much you owe on your auto loan, and whether you've made any late payments or suffered any foreclosures. Your credit score, meanwhile, is the three-digit number that lenders use to determine how likely you are to pay back your debts on time.

Here's a look at the differences between credit reports and credit scores.

Understanding Your Credit Report

Three national credit bureaus each maintain their own reports on your financial activity: Equifax, Experian, and TransUnion. You can order one copy of each of your three reports every year for free. Do this at Do not order these reports from other sites that might try to charge you.

Once you get your reports, it's important to know how to read them. Each of your reports will start with the most basic of your personal information: your name, birthdate, address, past addresses, Social Security number, and employment information. Don't be surprised, though, if not all of your past jobs are listed. Not all employers report information on their employees to the credit bureaus.

Public Records

Ideally, the public records section of your credit report will be empty. This section lists the financial missteps such as foreclosures, bankruptcies, and court judgments that can cause your credit score to plummet.

If a foreclosure or bankruptcy is listed here, you'll also see information on when a creditor filed the judgment against you. TransUnion will also list a date on which each of your negative judgments will disappear from your report. These dates, of course, vary. Foreclosures remain on your credit report for seven years. Chapter 7 bankruptcy filings stay on them for 10 years, while Chapter 13 bankruptcy filings also fall off your report after seven years.


Your credit reports have two sections devoted to your credit accounts. The bad one is labeled "Adverse Accounts." This section lists credit accounts — such as open credit cards — on which you have either missed a payment or been late. These financial blunders will stay on your credit report for seven years. This section will also list how much you owe on these accounts.

There is also the "Accounts in Good Standing" section. This part of your report lists open credit accounts that you have paid on time for a specific period, usually the past 53 months. Again, this part of the report will also list how much you owe on these accounts.

Credit History

The last major part of your credit report is devoted to "Credit History Requests." If a mortgage lender requested your credit reports — to make sure that you haven't paid your bills late — it will be listed here. You might see, too, that a potential landlord requested your credit reports. Many will do this before leasing their apartment units to renters.

What's most interesting about this part of your report is that every creditor that requests your reports is required to list a reason why. You'll see these reasons listed here, too.

Understanding Your Credit Score

Credit scores generally get more press than do credit reports. That's because lenders use these three-digit numbers when deciding who gets loans and at what interest rates.

The most important of your credit scores is the FICO score. Other companies offer credit scores — the VantageScore is a popular example — but none of them have the same impact on your ability to qualify for a loan.

FICO credit scores run from a low of 300 to a high of 850. The higher your score, the better. Lenders generally consider FICO scores of 740 or higher to be excellent ones. If your score is lower than 640, though, you might struggle to qualify for a conventional mortgage loan or other loans or forms of credit.

Your FICO credit score is only made up of the information contained in your credit reports. Not all bill payments, for instance, show up on your credit reports. You might pay your monthly utility and cell phone bills on time, but they don't show up on your credit reports and, therefore, don't have any positive impact on your FICO score.

According to FICO, your FICO score is made up of five parts. The most important, consisting of 35% of your score, is your payment history. If you make your credit card, auto loan, mortgage loan, and other payments on time, this part of your score will be strong.

An additional 30% of your score is made up of the amount you owe on credit card accounts and revolving loans. The length of your credit history makes up 15% of your score. In general, longer credit histories will provide a boost to your credit score. (See also: How to Use Credit Cards to Raise Your Credit Score)

An additional 10% of your score is determined by the type of credit you use. FICO will look at your mix of credit cards, mortgage loans, and installment loans when determining whether your credit mix is a healthy one.

New credit influences the final 10% of your score. FICO says that consumers who open several new credit accounts in a short period of time represent a greater risk for lenders. Because of this, opening five new credit card accounts in two months could cause your credit score to drop.

Both your credit reports and score are key to managing and understanding your financial health. Keep tabs on both to stay in top financial health.

Do you track both your credit report and your credit score?

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