Credit Report vs. Credit Score

The terms credit report and credit score seem synonymous, but really there is a difference between the two that as a consumer is important to know. To sum it up you can have a credit report without a credit score but not the other way around. If you’ve pulled your yearly free credit report at annualcreditreport.com (which you really should!) you’ll notice it’s missing a credit score. Let me break it down:

 The terms credit report and credit score seem synonymous, but really there is a difference between the two that as a consumer is important to know. To sum it up you can have a credit report without a credit score but not the other way around. If you’ve pulled your yearly free credit report at annualcreditreport.com (which you really should!) you’ll notice it’s missing a credit score. Let me break it down:

• A credit report is the detailed itemization of all debt that has been accumulated throughout your lifetime, both open and closed. They are typically many pages long and detail all of your debt activity. This includes any home loans, car loans, credit cards and other types of revolving debt. A credit report is broken down into many sections detailing your open accounts, closed accounts, derogatory items and public records. Derogatory items show any late payments and collection accounts. Public records include items like bankruptcies, foreclosures, judgments and liens.

What you won’t find on a credit report are bank accounts or any other types of accounts like your cable or phone bill typically, well unless these items become a collection. You may not also have a credit score. It is not technically the job of a credit report to give one to you.

• So this leaves us with what a credit score is exactly. A credit score is basically a more objective opinion of the items on your credit report expressed as a number. This is why when a creditor pulls a credit report to obtain a credit score; they’ll likely have three different numbers. So how can there be three different numbers? There are three credit bureaus, TransUnion, Equifax and Experian. Each bureau analyzes your comprehensive credit report slightly different by weighing your late payments slightly differently or rewarding your on time payments a little better.

As a consumer you have the right to dispute any item that appears on your credit report, but it is impossible to change your credit score directly. One way to think about it is to imagine the process it takes to make chocolate chip cookies. There may be many different ways to bake them, with different ingredients or different amounts of these ingredients but in the end you’ll have chocolate chip cookies. When you dispute an item on your credit report – or change an ingredient in your cookies, you’ll end up with slightly different tasting chocolate chip cookies – or a slightly different credit score.

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