Credit Reports and Credit Scores: The Difference

We often hear people use the terms credit report and credit score interchangeably without realizing they are different. It’s understandable since credit scores and credit reports are related (credit scores can be based upon information found in a credit report). Both may be used by financial institutions, employers and others to make critical decisions affecting your ability to obtain a line of credit, loan, employment, insurance or rental. However, credit reports and credit scores are used for different purposes, come with very different rights and aren't equally transparent.

Credit Reports

A credit report (compiled by a consumer reporting agency) is used to determine whether you are eligible for

  • credit
  • a business account
  • a business transaction
  • insurance
  • a license
  • employment
  • a government travel card

Credit reports can also be used to assess a person’s lifestyle, general reputation and personal characteristics. The information is not only used in the financial context, but by government agencies during the course of investigations and by state/local child support agencies.

Credit reports usually contain

  • a person’s Social Security number
  • identifying information (name, current and previous addresses, date of birth and telephone numbers)
  • employment information

Credit reports can also contain information on

  • credit accounts
  • debts
  • credit inquiry
  • legal information (civil judgements, liens, foreclosures, wage garnishments, bankruptcies and delinquent child support payments)
  • salary and life insurance information (in some cases)

You also have rights under federal law (Fair Credit Reporting Act) in regards to your credit reports.

Credit Scores

A credit score is a numerical value or categorization a lender uses to predict certain credit behaviors (i.e. default). A credit score may be used to determine whether to someone gets credit, credit terms and interest rates. The most commonly used credit scores are the FICO Score and the VantageScore.

Credit scores may be based on information included in a credit report, but also on other information. In fact, the exact formulas for determining credit scores are often considered trade secrets. 

While you do have some rights when it comes to credit scores, they're not the same as credit reports.