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What's the Difference Between a Credit Score and Credit Report?

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There are two different ways that companies look at and monitor your credit when they are considering giving you a loan. The first is your credit report or credit history. The second is your credit score. If you are interested in managing your credit responsibly, you need to consider both ways and do everything you can to make sure that you have both a good credit history and a good credit score. Your credit history will definitely affect your credit score.

What Is My Credit History or Credit Report?

Your credit history is a record of your payments, loans, and other things that involve making payments on time. The banks you have credit cards or loans through will submit your payment history and balance information to the credit bureaus. This list should include all of your active accounts, the number of times you have had a late payment over the last seven years, the amount of credit available on each account, and any information on accounts that have gone into debt collections. Additionally, if you are late on your utility payments they may report it to the credit bureau as well.

There are three different credit bureaus and not all of the institutions report to all of them. You should check your credit report at least once a year, to make sure that no one has stolen your identity and that all of the information is correct. You can check your credit report from each bureau for free once a year. You can stagger how often you check the reports to monitor your credit more closely. You will need to dispute any incorrect items on your credit report and file a police report if you find an account opened that you did not authorize.

Actively monitoring your credit is just one way that you can work on handling your credit responsibly. You should monitor your credit even if you do not regularly borrow money. This protects you from identity theft and makes it easier to protect your assets and qualify for a loan if you need to take out a mortgage or have a financial emergency.

What Is My Credit Score?

Your credit score is a rating based on your credit history and other factors regarding your credit. Your credit score will range up from 300 to 850 if you are looking at your FICO score. The higher your score the better your credit score, and it will be easier to qualify for lower interest rates. It will be easier to get loans and qualify for the best mortgage options.

Your credit score looks at several different factors, which include your payment history, the amount of time you have had a credit history, the amount you owe, and the amount of credit you still have available to you. They also look at any bad or old outstanding debts. There are a lot of contributing factors, but you are rewarded by making your payments on time and by making sure that you do not come too close to your credit limit. When you are thinking about closing your credit cards, you should always leave your oldest card open, even if you no longer use it. You should also be careful about closing out an old credit card you have paid off when you are close the limit on your other cards, because it can lower your credit score.

Most people will need to borrow to purchase a home, which is why you should be concerned about your credit score. Other than that you should work on not borrowing money and paying off all the money you owe. This will make it so that you have a good credit score and it will make it easier to manage your credit in the future.

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