A credit report is like a report card of your financial history.
When you make a payment on a credit card or loan, those companies keep records of payments. They report your credit, loan and payment history to one or more credit reporting companies. The credit reporting companies combine the information into a single credit file. Three nationwide companies prepare credit files for people in the U.S.: Equifax, Experian, and TransUnion. Under Federal law, you are entitled to receive one free copy of your credit report from each credit reporting company every 12 months. (Information from annualcreditreport.com).
Credit reports may include: a list of companies that have given you credit or loans, the total amount for each loan or credit limit for each credit card, how often you paid your credit or loans on time, and the amount you paid, companies that have asked to see your credit report within a certain time period, your address(es) and/or employers, and other details of public record.
For more information visit www.consumerfinance.gov/askcfpb/309/what-is-a-credit-report.html.
A credit score is a number that is used to predict how likely you are to pay back a loan on time.
Your credit score starts with the information about you from your credit report. A mathematical formula – called a scoring model – is then used to create your credit score.
Credit scores are used by companies to make decisions such as whether to approve a mortgage at a certain rate or issue a credit card. Different lenders use different scoring formulas, so your score can vary from lender to lender. Usually a higher score makes it easier to qualify for a loan and may result in a better interest rate. Most scores range from 300-850.
Under Federal law, you are entitled to receive one free copy of your credit report from each credit reporting company (Equifax, Experian, and TransUnion) every 12 months.While you can receive your credit report for free from the three agencies, the score will cost you a small fee. The score is a number that is helpful to know if you are ready to take out credit such as to buy a house or car.
FICO scores are shown below, but there are many other scores out there as well. Here is a full listing from the Consumer Financial Protection Bureau (CFPB) of all the reporting agencies.