Credit Score v. Credit Report

Alright, I sense some confusion between credit scores and credit reports, so let’s clear it up.

Clarity matters, because not knowing the difference between you credit report and your credit score will only lead to massive confusion.  And confusion leads to fear.  And fear leads to the dark side.*  So, we agree, we don’t want any confusion when it comes to credit reports and scores.  How do you identify credit reports and credit scores in the wild?

Credit Report: a multi-page document showing credit activity.  It’s reported by lenders to the credit reporting corporations.

Credit Score: a number that’s supposed to report your creditworthiness.  It’s generated by proprietary algorithms of the company doing the reporting.

Easy, no?  Credit report: multiple page document; credit score: a number.  So, what does this mean?

First, it means that you can only directly affect you credit report, not your credit score.  Sure, you can indirectly affect your credit score by changing you credit report; but since the algorithms used by the credit score companies are trade secrets, I suggest you not waste your life by trying to manipulate the algorithms.  Just let them do what they do.  Worry about your credit report, if you’re going to worry at all.

I really don’t want to get this blog post mired down in credit management, because there’s quite a bit to it.  Instead, if you’d like to learn more about credit reports, check out the Federal Reserve Bank of San Francisco’s brochure on credit reports.  It’s very informative.

*Star Wars, for the win.

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