Differences Between Credit Reports and Credit Scores

America’s obsession with credit has led to the development of a finely tuned industry that tracks, monitors, catalogs and scores it all.

If you’ve got any form of credit, your payment history (or lack thereof) is reported to the major credit bureaus, as are all your borrowing and lending agreements. Your requests for credit that aren’t approved get recorded, and your requests to see your credit information are also logged for people in the lending business to see. Anything that has to do with your credit history gets written up in a credit report. Based upon the credit report, the credit bureaus will then calculate your credit score. 

What is a credit report?

When it comes to your credit report, the credit bureaus receive information from all banks, vendors and lenders, all the time.

The information is then cataloged as it gets constantly updated. Included in your credit report is all sorts of personal information, such as your social security number, your address history and any other names you may have gone by in your past (the vast majority of names will be maiden names, of course). It also includes the list of people who asked to see your credit report.

It’s very important to remember that even though the credit report system is fully automated glitches can and do occur, and outdated information can remain in your credit report. 

What is a credit score?

A credit score is then generated by the credit bureau based upon your credit report.

This score is an easy way for lenders to assess your financial track record, and goes a very long way to helping them to decide whether or not to loan you money. In fact, your credit score is probably the single most important factor in a lender approving a loan. 

To learn more about credit scores and credit reports, be sure to consult with a financial adviser or a consumer advocacy group that specializes in credit issues.