Credit Report vs. Credit Score: What's the Difference?

Your credit score and credit report are both very important. When you apply for a credit card or loan, lenders will check your credit score and the information in your credit report to determine your eligibility.   

However, your credit score and credit report are not one and the same. To help clear up the confusion, we're taking a closer look at the differences between credit scores and credit reports.

What's a credit report?

A credit report is a detailed summary of your borrowing and payment history. It includes information about your loans and lines of credit, payment history and credit inquiries in your name. Think of it like a “report card" in school, but for your credit activity.

How to check your credit report

There are three major credit bureaus that produce credit reports: TransUnion, Equifax and Experian. You can check your reports for free by visiting AnnualCreditReport.com. In fact, it's a good idea review your reports regularly to make sure everything is accurate, especially before you apply for new credit.

If you spot an error or inconsistency—such as an account or address you don't recognize—contact one of the credit bureaus to dispute it. Errors on your credit report could impact your credit and may even be a sign of identity theft.

What's a credit score?

Your credit score is calculated using the data in your credit report. Lenders use this number to measure your “creditworthiness," or how likely you are to repay the money you borrow on time. Here's another way to think about it: if your credit report is like a report card for your credit activity, your credit score is similar to a grade point average (GPA). The higher your score, the better!

There are five main factors that make up your credit score:

• Payment history— It's important to make regular on-time payments.
• Credit utilization— This refers to how much credit you are currently using compared with your total available credit.  
• Credit history— Generally, the longer your credit history, the better it is for your credit score. 
• Credit mix— It helps to have a divers​e mix of credit accounts, such as loans and lines of credit.
• New credit— Too many new credit accounts or hard credit inquiries in a short period of time can lower your score.

How to check your credit score

Your credit score can impact many aspects of your financial life, from getting a low-rate credit card to securing a mortgage for your dream home. Try to maintain a strong credit score and check it often, especially if you're getting ready to apply for a loan or line of credit.

There are several websites you can use to look up your credit score. Your credit card company may also provide a free score each month.

Improving your credit

If your credit score isn't where you want it to be, you can raise it by practicing good credit habits! One of the best ways to maintain a healthy credit score is to make consistent, on-time payments. You can set up payment reminders or schedule auto-payments to prevent missing a due date.

Another tip is to keep your credit utilization below 30%. For example, if your available credit is $1,000, you'll want to keep your balance at no more than $300. You could do this by spending less, making multiple payments in a month or increasing your credit limit.

For more credit tips, check out our videos, interactive learning modules and upcoming webinars to help you borrow smarter and use credit responsibly.