Credit Score vs. Credit Report: Which One Is Better?

Your credit score and credit report are pretty much the same thing, right? Far from it. Although a fair number of consumers conflate the two, each has different information that is used for different purposes.

Actually, we should say “credit reports,” because there are three. The United States has a trio of national credit bureaus – Experian, TransUnion and Equifax – that compete to offer the most comprehensive information to their customers. Those customers could include mortgage lenders, car loan providers, insurers, collection agencies, landlords and potential and current employers. And you. 

Unlike your credit score, your credit report provides detailed information on your financial history with loans, credit cards and charge cards. If you’re delinquent on any of your bills, your credit reports will likely show it. It also gives the reader information on the number of accounts you have open, their outstanding balances and a host of other details.

Each report may be slightly different. That’s why it’s important to look at all three when judging your credit health. Depending on the lender's methodology, your activity may or may not find its way to all of your reports. In other instances the information may be incorrect or missing altogether. A business doesn’t have to report to all of the bureaus – or to any of them, for that matter. And it’s not necessarily the bureau’s fault if the information is incorrect or missing. The lender may have erred in reporting or transmitting the data.

You’re entitled to a copy of your credit reports from all three bureaus once every 12 months. Even better, they’re free. The Big Three sponsor a site, AnnualCreditReport.com, that provides applications for getting your reports. Other websites may offer the reports to you as part of a promotion or as part of a paid membership. Some may try to trick you into thinking you’re on the official site. Don’t fall for it. Make sure the web address in your browser says “annualcreditreport.com” and don’t go to the site from another link. Type it directly into your browser to avoid fraud.

Many lenders, especially credit card companies, don’t much care what is on your credit report. They’re not interested in digging through all the data and judging how much of a credit risk you represent. Instead, they pay somebody else to do it for them. Although there are other scoring companies, such as VantageScore, the Fair Isaac Corporation (FICO) so dominates the field that the terms “credit score” and “FICO score” are often used interchangeably.

Whichever company is calculating it, your credit score – in essence, a “snapshot of your credit report,” as Bethy Hardeman, senior manager for product marketing at Credit Karma, a credit advisory website, puts it – summarizes your creditworthiness (much as your grade summarizes your performance in a course). The higher your score, the less risk you represent. According to FICO, your payment history represents the biggest part of your score. The amount you owe is a close second, and the length of your credit history is a distant third. You can have a score as low as 300 and as high as 850. However, it’s nearly impossible to have a perfect score.

Remember those three credit bureau reports? FICO calculates a score based on each of them. Different lenders also use different scoring models – not necessarily just from FICO – so people generally have have multiple credit scores.

Unfortunately, you aren’t entitled to automatically receive your credit scores for free, the way you are with your credit reports. You might have to pay for them. The Dodd-Frank Act gives you the right to see your credit score from any creditor that used it to make a credit decision. Many credit card companies and other financial institutions now provide it free of charge, as do advisory services such as Credit Karma. Beware, though: Some websites and services may offer a “free” score, but it often comes with expensive membership fees or other conditions that you don’t want.

Without the credit report, there would be no credit score. Your credit score is important, but if you really want to dig into your credit and review your history, you need your credit reports. If you’re looking to raise your credit score, the first step is to clean up the reports: Correct any errors and pinpoint the weak spots (such as where your biggest outstanding balances are). Bear in mind, though, that any positive change to your credit score takes time, despite what those breathless mail and email notices offering to “raise your FICO score within weeks!” may claim.