Since posting about our Central Bank donation for free Credit Reports, we’ve had some questions about the difference between a Credit Report and a Credit Score.
Your Credit Score is a three-digit numerical grade that provides a snapshot of your creditworthiness to credit card companies, mortgage lenders, auto lenders, etc. Although other types of credit scores exist (for example, the VantageScore), the FICO score is used the most. FICO scores range from 300 to 850; the higher your score, the more likely lenders will be to believe you’ll pay back the money you’re borrowing. In general, a good score is considered to fall between 700 and 749, and a score of 750 or higher is typically considered excellent.
Your Credit Report has basic identifying details like your name, address and Social Security number. It also contains information like the date you opened your various credit accounts and loans, your balances, the total loan amounts and credit limits on your accounts and your payment history. It also contains any public-record information like bankruptcies or tax liens that could impact your credit. Most negatives, such as late payments or accounts in collections, can stay on your credit report for seven years—except for Chapter 7 bankruptcies, which will stay on there for 10 years.
So, the biggest difference, your credit score is just that—a score—but usually gives no indication as to what contributed to the number. That’s where the more exhaustive credit report comes in. If you notice your score has dropped, the only way to determine the cause is to look at your credit report and comb through the details for things that could have caused the drop, like missed payments or hard inquiries.
Having trouble with your credit, WE CAN HELP! Call 712-252-1861 ext. 47 to set up an appointment with one of our Consumer Credit Counselors.