Credit Report vs Credit Score Explained in Plain English

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Because of the Fair Credit Reporting Act or FCRA, consumers can now get a free credit report once every twelve months. This is in the effort to help consumers detect anomalies in their credit report as soon as they can and correct the misinformation. Not everyone is aware though that the credit score is not included in the free credit report. A credit score can cost you somewhere in the range of $7 – $12. Today, we’ll explain away the credit report versus credit score confusion.

Credit report

A credit report contains your credit history and information about you including your identity, public record, credit report vs credit scoreexisting credit and personal inquiries. Your identity contains your name, address, birthday, Social Security number and some even have your employment information. Existing credit is where credit card information, loans, insurances and mortgages can be found. If you have any court judgments, have filed for bankruptcy or have tax liens against one of your properties, it can be found in the public record section of the credit report. You will know if a company or an individual has requested your credit report in the inquiries about you section.

There are three major credit reporting bureaus or agencies that compile credit reports. These are Equifax, TransUnion and Experian. You can request a free credit report through one of these agencies. Getting credit reports after you have availed of the free credit report within a year will cost you around $15 but Equifax has a $39.95 deal that includes credit reports from all three agencies plus credit scores.

Credit score

The credit score on the other hand is a three digit number that ranges between 300 to 850. Anything below credit report vs credit score400 is considered low and anything above 700 increases your chances of getting a loan greatly. The credit score is computed using the information found in your free credit report. There is no absolute computation in getting the credit score but the most widely used is the FICO. Lenders see credit scores as a measure of how risky the applicant is financially. If you have a high score, it is a good indication that you will pay your payments on time.

Here’s the basic FICO computation of your credit score:

Total debt value – 30%

Credit history – 15%

Number of account types – 10%

New credit – 10%

Credit report VS credit score

Credit report and scores are not one and the same but are linked to each other. A credit report is detailed information of your credit history as well as present credit details while credit score is an overall summary of the credit report in the form of a three digit number. So when it comes to credit report vs credit score, both are different but support each other.