Credit Score vs. Credit Report: Why You Need Both

Credit scores and credit reports both play a vital role in your finances, but they’re not the same thing.

1. A credit report is a thorough account of your credit history and details activities like how well you’ve paid debt and how much credit you’re currently using. » Learn more
2. Credit bureaus then take this information and boil it down into a three-digit number: your credit score, which grades your creditworthiness. » Learn more

Credit scores vs. credit reports

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Credit reports

A credit report is a comprehensive account of your credit history. This includes any activity you’ve had with credit cards, loans, and other forms of borrowing. You’ll also find bankruptcies, foreclosures, and unpaid bills that are in collections.

What's in a credit report?

A credit report is organized into four sections.

• Personal information: your name, Social Security, date of birth, address, employer, etc.
• Credit accounts: types of credit accounts you have (credit card, student loan, car loan, etc.), the credit limits on each, and whether they’re still open
• Credit inquiries: a record of soft and hard inquiries (i.e., credit checks by lenders, etc.)
• Public records: foreclosures, bankruptcies, tax liens, past-due payments on child support, and more

Who looks at your credit report?

Anyone who has a vested interest in your financial ability to afford homeownership can pull your credit report, which results in a "hard inquiry." That can be:

• Mortgage lenders, which use credit reports to determine whether you’re eligible for a loan, as well as the terms (such as interest rates) if you’re approved
• Insurance companies, which may look at your credit report when deciding your rate.
• Utility companies — such as telephone, electricity, or water — which might check your payment history before providing services
• Credit card companies, auto lenders, landlords, and so on

Soft inquiries don’t have an impact on your score and can come from:

• Your lender for pre-approvals
• Employers as part of a background check
• Checking your own credit

How is a credit report different from a credit score?

Credit scores are based on the information in credit reports — they cannot exist without them. Think of credit reports as a detailed overview of your credit history , while credit scores reflect this information with a grade.

Where can you find your credit report?

You actually have three credit reports, one from each of the main credit bureaus: Equifax, Experian, and TransUnion. You can get one free credit report from each of these bureaus every 12 months. Apply to get yours at Annual Credit Report.com or by calling (877) 322-8228.

Credit score

A credit score is a three-digit number that quantifies the information found in your credit report. Like credit reports, you’ll likely have more than one credit score (most people have at least two), with FICO and VantageScore being the top credit scoring companies.

How is a credit score calculated?

Each scoring company has a slightly different algorithm for determining your score. But, in general, each scoring company will weigh your payment history, credit utilization, length of credit history, credit mix, and recent activity.

You’ll likely have more than one credit score, with each number reflecting a different bracket of quality. Here are the credit score ranges for the two most common scoring companies, FICO and VantageScore:

FICO credit score range

VantageScore credit score range

Check your credit score without hurting it by ordering an annual free credit report, checking with your credit card provider, or using an online credit monitoring service.

Which is more important, your credit score or credit report?

Credit scores and reports are equally important factors in your financial profile. The information in your credit report determines your score, which lenders then use to assign a mortgage loan amount, insurance rate, and other terms.

Lenders will check your score to make sure you fit their criteria for a mortgage loan.

For a conventional mortgage, you generally need a credit score above 620. Government-backed loans, such as from the FHA loans, you can qualify with a score as low as 500.

» MORE: What Credit Score Should I Have to Buy a House?

A low score can hurt your chances of being approved for a loan, or you may need to compensate with a larger down payment or higher interest rates. So take steps to make sure you have a healthy credit score and report: pay off your bills in full and on time, keep your credit utilization low, and regularly check your credit report for errors.