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Fearless Financial Future

Credit Score, Credit Report – Meh, what’s the Difference?

One of the most common questions consumer economics educators receive about credit has to do with the difference between a credit score and a credit report. In some instances, both are used interchangeably and that has helped fuel the confusion. So, let's start by defining these terms:

The difference

Credit report: "A credit report is a statement that has information about your credit activity and current credit situation such as loan paying history and status of your credit accounts."

Credit score: A credit score is a three-digit number, which ranges from 300-850. A mathematical formula creates a score from the information in your report. Several factors influence your credit score: (a) payment history, (b) amount owed, (c) length of credit history, (d) new credit, and (e) number and types of loan accounts and credit usage.

In other words, your credit report is a detailed profile of what you have been doing in your financial life with the money you borrowed, and they use this information to develop your credit score. Your score provides a summary.

Why it matters

Credit is an important part of life in the U.S. and mismanagement of credit have a tremendous impact on your financial life. Credit affects many of the decisions we make throughout our lives (e.g. education, transportation, housing, etc.).

Notably, there are people who are credit averse; they try to avoid using credit. I have spoken with individuals who had challenging experiences with credit or those who have seen others mishandle their credit cards and chose to avoid it. There are pros and cons of using credit and people borrow for multiple reasons: credit cards, car loans, student loans, mortgages, etc. Credit utilization depends on your needs and situation. Whether or not you chose to use a credit card or other forms of credit, it is important to understand the difference between your score and report.

Few more points to consider

  • Three main credit-reporting bureaus collect your financial information: (1) TransUnion, (2) Equifax, and (3) Experian
  • You are eligible for a FREE credit report from these reporting bureaus every 12 months – see for more information
  • These bureaus are governed by the Federal Fair Credit Reporting Act (FCRA), which promotes accuracy, fairness, and privacy
  • You may have different credit scores depending on what each bureau is reporting and the scoring model they are using

Credit is a multilayered topic and it may seem intimidating or overwhelming to look into these, but it is an excellent idea to pay attention to your credit activities to make sure there is no suspicious or fraudulent information on your report.