Credit Score vs. Credit Report: Why You Need Both

Written by Steven PorrelloOctober 17th, 20224 minute read

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

📊 Credit report
🔢 Credit score
Detailed history of your personal use of credit: cards, loans, etc.
Three-digit number that measures your creditworthiness
Based on credit activity reported by lenders
Based on credit report
Credit bureaus: Equifax, Experian, TransUnion
Scoring companies: FICO, VantageScore

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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

⚡️ Quick Tip
When you apply for new credit, a hard inquiry hurts your score by a few points and stays on your credit report for two years. Don't open new credit before applying for a mortgage.

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.

Payment history
(35%)
Your history of repaying loans and credit cards, including late and missed payments
Credit utilization
(30%)
The amount of debt you’re currently carrying vs. the total amount of credit you’ve been given. So if you owe $10,000 on three credit cards that total $40,000 in credit limits, your credit utilization calculation would be 25%.
Length of credit history
(15%)
The age of your oldest credit account and the average age among all accounts
Credit mix
(10%)
How much experience you have with different credit accounts, such as loans, credit cards, and mortgages
Recent activity
(10%)
New accounts you’ve opened, as well as recent applications for loans or credit cards

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

300–579
580–669
670–739
740–799
800–850
Very poor
Fair
Good
Very good
Exceptional

VantageScore credit score range

300–579
580–649
650–699
700–750
750–850
Very poor
Poor
Fair
Good
Excellent

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.

⚡️ Quick Tip: Finding a buyer's agent is a good first step!
Connecting with an experienced local agent is a good way to kickstart your home buying process. Agents can help you set a budget and recommend trusted lenders so you can compare rates, get pre-approved, and start touring houses.

We recommend trying out Clever Real Estate’s free agent matching service. Clever matches you with the best local buyers agents with no obligation. And you can qualify for 0.5% cash back — that’s 2,000 on a $400,000 home purchase! Learn More.