![]() ![]() There is also information about you that is not included in your credit report, such as your: Other pertinent information to your credit, such as any judgments, tax liens, and/or bankruptcies you’ve filed.Inquiries, including requests by lenders or other authorized parties to view an individual’s credit report.Collection accounts and public records, such as bankruptcies, foreclosures, and liens.Credit accounts, including credit cards, loans, and mortgages, with your account information, such as your balance, payment history, and credit limit.Personal identifying information, including your name, address, and Social Security number.There is a myriad of information that may be included in your credit report, such as: Hot Tip: For more detailed information, check out our in-depth piece on the difference between your credit score and credit report. A credit report can give lenders and other potential creditors a snapshot of how you’ve handled your debts and payments over time. ![]() Your credit report is a detailed report of your overall credit history that contains information about your financial life, while your credit score is a numerical representation of your creditworthiness. Your credit score depends on your credit report, but they aren’t the same thing. Image Credit: garagestock via Shutterstock How Your Credit Score Differs From Your Credit ReportĪ good credit score can open financial doors. These entities can use a hard or soft inquiry to check your creditworthiness.īottom Line: A higher credit score will not only improve your chances of getting approved for a loan or credit but also determine how favorable your interest rate will be. In addition to lenders, other entities that may want to check out your credit history include landlords before you rent an apartment, cell phone companies before they issue you a voice and data plan, and potential employers before they’ll offer you a job. Your credit score is a key determinant of whether you’ll get a high or low interest rate for credit cards and loans or even if you qualify for credit at all. When you apply for credit products such as loans or credit cards, lenders check your credit to determine approval and your terms. FICO uses the information provided by the 3 major credit bureaus, Equifax, Experian, and TransUnion, to calculate your credit score. Still, it’s estimated that the FICO credit score developed by the Fair Isaac Corporation is used in more than 90% of lending decisions by top lenders in the U.S. Multiple credit scoring models exist, including FICO, VantageScore, and models built by lending or insurance companies. Your credit score can have a big impact on many key aspects of your life. ![]() A good or excellent credit score can offer significant savings on interest rates.Įmployers, landlords, and insurance companies may also use your credit score to evaluate your reliability and trustworthiness. Your credit score also influences the credit terms you can access - the higher your credit score, the better your terms, such as interest rate. It offers a reference point for potential creditors that indicates how likely you are to pay back your debts on time.Ĭredit scores are important because your score influences your ability to obtain credit products such as credit cards and loans. Your credit score uses information from your credit report. The higher your credit score, the more creditworthy you are. What a Credit Score Is and Why It Is ImportantĬredit scores put a number on your creditworthiness ranging from 300 to 850. Let’s get into the details of your credit score and what you can do to maintain and build great credit. If you need to work on your credit to get the best credit cards or score the lowest rate on a mortgage, it pays to know what’s in your score - and how to improve it. And credit scores aren’t always easy to comprehend, especially if you’re struggling to build or rebuild your credit.īut understanding your credit score and what goes into it can be empowering. They’re like grades on a report card that reflect how well you manage credit. ![]()
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