Why the Difference Between Your Credit Report and Your Credit Score Matters

Photo illustration to accompany article on the difference between credit score and credit report Grant Crowder and Getty Images

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You’ve almost certainly heard the terms “credit score” and “credit report” used when applying for credit cards, car loans, mortgages, or rental properties. But have you ever wondered what the difference is?  

Basically, one is a report of your financial history, and the other is a numerical score based on that report. 

Both metrics are used by lenders, brokers, utility providers, and even employers and landlords to judge your creditworthiness. And because your credit score is calculated using the information on your credit report, it’s important to monitor your credit report regularly. The FTC (Federal Trade Commission) reports one out of five people find an error on their credit report. These errors affect your credit score and ability to qualify for loans, rentals, credit cards, and more. And with many Americans facing new and unexpected financial challenges, the new pandemic economy leaves little room for error. 

For example, the government’s 2020 stimulus legislation, called the CARES Act, granted some forbearance protections to people who hold federal student loans, suspending payments until September 30, 2020, without penalty. If you find yourself in a position to take advantage of any type of forbearance protection, it’s important to do your research on exactly what steps to take. One reported late payment will appear on your credit report and stay there for seven years unless you dispute it. That’s one reason why monitoring your credit report, and therefore your credit score, is an essential step to financial health.  

What’s the Difference Between a Credit Score and a Credit Report 

Your credit report and your credit score are based on similar information, but by no means are they the same. 

Your credit score is a single three-digit number lenders can use to assess your overall creditworthiness quickly. This score is based on the information found in your credit report, an extensive summary of the credit history you’ve accumulated over your lifetime. The three credit bureaus — Equifax, Experian, and TransUnion — gather this information and outline it in a report. You can access each of those reports at AnnualCreditReport.com. FICO (Fair Isaac Corporation) will then use the report to calculate a score. 

Think of your credit report as a school exam; it’s a report on your financial behaviors. Your credit score is the grade for the exam.    

A common misconception, according to Rod Griffin, senior director of consumer education and advocacy at Experian, is you’ll get to see your credit score when you ask the credit bureaus for a copy of your report. To access your credit score, you’ll need to check your credit card statement, online bank account, or purchase it from one of the credit bureaus. 

Credit reports and credit scores have different applications and uses depending on who’s checking it and for what purpose.

Credit report vs. credit score

Credit ReportCredit Score
A lengthy text-based report including detailed information on: 
Personal I nformation 
Employment information
Public records
Accounts in collection
Payment history
Balances owed
Credit account age
New credit accounts 
Mix of credit types
A single number assessing your overall creditworthiness based on the information in your credit report 
Created from data compiled by the three credit bureaus: Experian, Equifax, and TransUnionCreated using a scoring algorithm, usually by FICO® or VantageScore
A stand-alone assessment existing separately from credit scoresCan only be calculated using the information found in a credit report
Judges creditworthiness based on the details of your current debt obligations and past credit history, including any prior derogatory marksUses five weighted factors to determine creditworthiness: payment history, balances owed, length of credit history, credit mix, and recent activity
Can be accessed directly through the credit bureaus or at AnnualCreditReport.comCan be accessed through one of the credit bureaus, your bank, your credit card company, or a credit counselor
Used by banks, lenders, collection agencies, insurance companies, utility providers, employers, and landlordsUsed by banks, lenders, collection agencies, insurance companies, utility providers, and sometimes landlords. Employers cannot access your credit score based on the FCRA.

How Your Credit Score Is Determined

Your credit score is determined using information from your credit report. The most common credit scoring system is FICO, which grades you using a numerical value between 300 and 850. 

FICO’s credit scoring algorithm analyzes five different factors gathered from your credit report. Each is assigned a different percentage weight depending on how important it is to lenders.

  1. Payment history

Accounting for 35% of your credit score, on-time bill payments is the most important factor influencing your credit score. Having a good payment history means you’ve made all your payments on time. Any payments late by 30 days or more appear on your credit report as a derogatory mark — and stays there for seven years. The more you miss payments, and the longer they are late, the more your credit score will be negatively impacted. 

  1. Debt owed

The amount of debt you carry has the second-largest impact on your credit score, to the tune of 30%. The amount owed is divided by your total credit available, making up your credit utilization ratio. The credit bureaus like to see credit utilization ratios below 30%.

  1. Age of credit history

The number of years your accounts have been open contributes to 15% of your credit score. The older the accounts, the better, as long as you responsibly use them regularly.  

  1. New credit account

Statistically, anyone who opens several new accounts in a short period of time is at a higher risk of not being able to pay their debt back. Having too many hard inquiries on your report, which are triggered when you apply for a financial product like a credit card, can bring your credit score down. Each inquiry will expire after two years. This recent activity accounts for 10% of your score.

  1. Credit mix

The final 10% of your credit score is determined by your credit mix, or the variation of different account types in your report. Having a balance of different accounts in good standing shows lenders you can make payments reliably on multiple types of debt. The three types of credit accounts are:

Installment credit 

Regular payments toward a loan in fixed amounts, such as a car loan or mortgage. 

Revolving credit 

Extensions made to a credit line you can use repeatedly, such as credit cards.  

Open credit 

Billing amounts that vary per cycle depending on your use, such as utility accounts. 

Pro Tip

Your credit score is a three-digit number based on the financial history recorded in your credit report. To protect your credit score, monitor your credit report to make sure it’s up-to-date and accurate.

How to Dispute an Error 

If you find an error on our credit report, you can dispute it directly through one of the three credit bureaus — Equifax, Experian, or TransUnion — online, by mail, or by phone. Describe the details of the error in writing and request the bureau update and correct the information. Include any documentation supporting your viewpoint. For example, if your student loan lender sent you an email addressing the CARES Act forbearance options, yet still reported you late, provide a copy of the email. 

For help disputing a credit report error, checking out our free dispute letter template.

Why This Matters 

Understanding the roles and functions of your credit score and credit report can be crucial to your financial well-being. 

Check your free credit report and FICO score at least once per year. (Due to the pandemic, you can check your credit report weekly through April 2021.) Pay attention to behaviors on your credit report that are heavily weighted toward your credit score. If something looks off, look into it. It could be the difference between approval or denial, so get ahead of it.