05 Sep Credit Score vs. Credit Report: What’s the Difference?
What’s the difference between a credit score and a credit report? Essentially, the former is a numerical representation of your creditworthiness, while the latter is a written history of your experience and responsibility with credit.
Knowing the difference is important too, as this will help you become financially literate. When you understand your credit score, you’ll be able to better understand your lending options, the terms you’ll access, and your rental and insurance opportunities with an excellent score. Plus, when you understand your credit report, you’ll be able to understand what you should dispute to build your score and the action you should take to improve your financial standing when cleaning up your credit report.
Keep reading for an in-depth review of how credit scores and credit reports impact you financially, their workings, key differences and similarities, and how you can improve both.
Credit Score
Credit ratings are three-digit telltales of your financial responsibility and history. They usually range from 300-800, but this boundary can vary by bureau. For instance, FICO, used by Experian, uses a scoring range ranging from 300-800. In contrast, XDS has their own scoring criteria, ranging from 300 to 1000.
They’re calculated using credit utilisation ratio (how much credit you use compared to what you have available), late payments, defaults, and hard inquiry frequency. These things usually appear on your credit report and are used to calculate your score.
Credit Report
Credit reports detail your payment history, credit utilisation ratio, late payments, defaults, and hard inquiry frequency. They also include personal information (full names, aliases, address changes, etc.)
Credit reports provide a more in-depth explanation of your credit history. As they list derogatory marks like debt review flags and judgments and current account balances. These things, along with the factors discussed above, help creditors understand your financial standing and circumstances. They play a huge role in creditors’ decisions of whether they should lend you money.
Differences and Similarities
While credit reports and reports may seem quite similar, there are some key differences you should note. This section discusses what the two have in common and what makes them different.
Differences
Credit scores and reports are not at all the same thing. Credit scores are a brief glance at your creditworthiness, whereas credit reports detail your financial history with credit in full and depth.
When you request your credit score, you’ll receive a 3-digit number. If you request your report, you’ll get a full rundown of what creditors see when they ask for your credit background.
Similarities
Credit reports and scores use the same things to determine your creditworthiness: your payment history, derogatory marks, and financial stability. For example, changing addresses frequently might show creditors you can’t afford rent payments. Several hard inquiries show that you’re desperate for credit.
Where Do You Get Your Credit Score and Report?
You can get a full credit report and score for free when you request a credit report from Credit Boost. We offer you a credit report that doesn’t hurt your score whatsoever. That’s because it’s a soft inquiry or self-inquiry. Credit bureaux are legally required to provide you with one of these for free each year. All we need is your ID number and contact details.
Get yours for free now! Remember, if you have any questions, don’t hesitate to reach out to us. We would love to answer your queries.