What is the difference between your credit score and credit report?

Your credit score and credit report are key components of your financial profile. They help lenders assess your credit risk. Together, they paint a comprehensive picture that guides lending decisions and influences your financial well-being. Understanding these elements is crucial for managing your financial health effectively.

A credit score is a three-digit number ranging from 300 to 900 that represents an individual’s creditworthiness. This score is computed based on the borrower’s credit history and repayment pattern for credit products like loans, and credit cards. It allows lenders to assess a borrower’s repayment capability and evaluate the risk involved in lending. 

A credit report is a detailed record of an individual's credit history. It includes information about the person's credit accounts, payment history, outstanding balances, credit limits, types of credit, and any negative information such as late payments, defaults, bankruptcies, or collection accounts. Credit reports are compiled by credit bureaus based on information from creditors, lenders, and public records. 

In essence, a credit report provides a comprehensive view of an individual's credit history, while a credit score condenses that history into a single number that represents their creditworthiness. Lenders use both credit reports and credit scores when making lending decisions, but the credit score often serves as a quick reference point to evaluate an individual's credit risk.

Also read: Top 5 things to watch for in your credit score report

Also read: Why do my credit scores differ across CIBIL, Experian, Equifax and CRIF High Mark bureaux?

“You can check your credit score either directly from the credit bureaus or via the various online platforms that have partnered with the credit score agencies. Most credit bureaus offer this service free of cost only once in a year. While the first check is free, you will have to pay the credit bureaus for every subsequent credit score and report,” said Adhil Shetty, CEO of Bankbazaar.com.

However, many online platforms allow you to check your credit score many times in a year free of cost. There are others who provide paid advisory services along with credit scores to help you improve your credit score. “Online platforms that provide free credit score checking services tend to be a better option because they allow you to access your report any number of times in a year without any charges. However, you must be careful with whom you share your data and stick to only highly trusted and secure platforms that do not access, retain, or use your data without your explicit consent,” said Shetty. 

“The free and paid reports provided by the credit bureaus as well as the free credit scores from platforms have the same data, though the presentation may differ slightly for better readability and understanding. The paid platforms may provide additional information and measures on how to improve credit score,” added Shetty.