Credit Reports vs. Credit Scores: Part 1

Credit Reports vs. Credit Scores: Part 1

What's The Difference?

What’s the difference between a credit report and a credit score? Some people think that credit reports and credit scores are one in the same. That’s not true. A credit report is an in-depth record of your credit history, while a score is an algorithmic rating based on your credit information. 

Your credit reporting includes a wide range of information about your credit standing and history, such as:

Who you are: This includes your name, social security number, date of birth, and in some cases, employment information.
Your credit: This is composed of your credit card accounts, mortgages, car loans, school and other loans, how much credit you have paid, and your payment history.
Your public record: This contains information about court proceedings and decisions for or against you, tax incentive grants or tax liens, or bankruptcies.
Inquiries: This simply contains a list of all the companies and people who recently requested a copy of your credit report. These are also known as “hard inquiries”. 


A credit score on the other hand, is a numerical assessment of your credit standing  based on the information in your credit report. Determinants of your credit scoring generally include the following:

Type and duration of accounts: Examples of these are your loans, mortgages and credit cards, and how long you've had them for.
Bill payment history: Late payment history could adversely impact your scores. Payment history is one of the more important determinants of your credit scoring. 
Available credit: Your credit utilization ratio – based on your reported credit limits and how much of that credit has been used – can also impact your scores. Higher utilization rates can adversely impact your credit score. This is why you may want to consider keeping older credit cards that may have extra balance capacity (which can offset utilization rate).
Outstanding debt: This includes all other loans and credits granted to you other than those previously mentioned. Too much debt, or numerous debt/credit lines opened in a short amount of time, could adversely impact your credit scores.

Be sure to check out Part 2 on common misunderstandings about credit scores.