Many people use the terms "credit report" and "credit score" interchangeably. But while credit reports and credit reports are interrelated, they're not the same thing. Read on to learn the difference between the two.
Your credit report provides a detailed account of your credit history. It lists most companies to which you owe money, companies with which you have open-ended credit, like a credit card, and other information that creditors and other companies report to the credit reporting agencies (also called "credit bureaus").
If a creditor reports a debt or revolving account, such as a credit card, on your credit report, your report will list the maximum credit limit extended to you by the creditor, the last reported monthly payment, the date of origination, the last date of activity on the account or debt, and whether the creditor considers you current on the account.
Because potential creditors use your report to decide whether to extend creditor or a loan to you—or to determine what your interest rate and terms will be—it's important to review your credit report regularly to ensure its accuracy and dispute any errors.
You may get a free copy of your credit report every 12 months from the three major credit reporting agencies by going to AnnualCreditReport.com. Also, as of 2020, you can get six free credit reports each year (for seven years) from Equifax. The free reports are in addition to the one free Equifax report—and the free Experian and TransUnion reports—that you can get each year at AnnualCreditReport.com.
Your credit score is a number assigned to you that is supposed to indicate your creditworthiness—that is, how likely it is that you will repay a loan or credit line. Many companies compute credit scores, and each computes them in a slightly different way. This means that you have more than one credit score at any given moment.
For the most part, however, credit scoring companies look at several factors when computing your score: payment history (whether you pay bills late or have filed for bankruptcy), outstanding debt, length of credit history, your credit mix, and how much new credit you have applied for.
While creditors often look only at your credit score, some will look at your credit report as well. But as a consumer, you don't need to worry too much about which one the creditor looks at. This is because for the most part, your credit score is based on information in your credit report. So, if you have a good credit report, you'll have a strong credit score—and vice-versa. Actions you take to make your credit report better (like disputing inaccurate information) will improve your credit score.
If you need help disputing an error in your credit report or want to learn about different ways to improve your credit, consider talking to an attorney or a legitimate credit counseling agency. You should, however, avoid credit repair clinics.