We often wonder what is the difference between Credit Report and Credit Score; while one is the detailed information of your loans and credits, the other is the 3-digit ranking given based on your credit report. Read on to learn in detail the differences between your Credit Score and Credit Report.
Your Credit Score is an important determinant in the loans and credit cards you apply. While your credit report gives you a clear picture of your debt management and improvement areas to achieve a stellar credit score.
Here are some key differences between your credit score and credit report
Your credit score is a 3-digit number that lenders use to determine whether or not to approve your credit application.
The Credit Report will give you information on your credit standing in terms of your payment history and the status of your credit accounts as well as details of any outstanding loans or debts.
The average person's credit score is a very important factor when it comes to getting the best credit and loans. It ranges between 300-900, while 750 is considered a good score and means you're more likely to qualify for loans and home loans.
Your Credit Report is a report of your credit status. It includes information on your credit standing and the factors that determine your credit score.
Who Generates My Credit Score And Credit Report?
Credit Bureaus are entrusted with the task of generating your Credit Score and Credit Report. In India, there are four authorized credit bureaus: CIBIL, Equifax, CRIF High Mark, and Experian. A person is entitled to one free credit score with a credit report in a year from each of the credit bureaus but it depends on which credit bureau your lender is affiliated with. You can request a credit report as well as your credit score from any of the four credit bureaus.
You can also generate your credit score along with a detailed credit analysis report for free from CreditMantri
Credit bureaus collect as much financial information about each individual as possible in order to generate a credit report about that person's creditworthiness. Banks and financial institutions provide them with this information on a monthly basis.
Is My Credit Score And Credit Report Co-Related?
Definitely so! Your credit score is generated based on your credit report.
Your credit report is what includes all your financial data like the loans and credit cards you hold, your repayment history, late payments or payment defaults, all your credit applications and even your rejected applications.
The credit bureaus run this report through their in-house algorithm to generate your credit score. So your credit score is directly related to your credit report. An outstanding credit report gives you a great credit score.
- A credit score of 700 and above is desirable for lenders while processing your loan application.
- Many lenders offer different interest rates based on your credit score.
- They also check your existing loans and credit cards to determine your loan amount eligibility.
Can I Check My Own Credit Score And Credit Report? Will It Reduce My Credit Score?
As a borrower, you have all rights to check your own credit report on a regular basis to keep track of your credit health. Such credit reports are known as a 'Soft Check,' and they have no effect on your credit score. Checking your credit score regularly assists you in keeping track of your debts and managing them effectively. You can also detect any errors or misinformation in your report and have them corrected as soon as possible.
Who All Can Access My Credit Score And Credit Report?
It is generally accepted that any lender is permitted to pull your credit report prior to sanctioning your credit; this could be a loan, credit card, or any other type of credit. In the loan application form, you grant them permission to do so. Your application will be processed based on the credit report. Every time someone pulls your credit report, it is noted on your credit history. These checks are known as 'Hard Checks,' and they have a minor impact on your credit score. That is why experts advise you not to apply for multiple loans simultaneously as they can reduce your credit score considerably.
What Is Considered An Ideal Credit Score? How Do They Affect My Personal Loan Interest Rates?
A credit score of 700 and above is considered to be ideal for lenders to sanction your loan immediately. As your credit score inches closer to the 900 mark, you get greater offers on your loan interest rate, loan amount and repayment tenure.
A Personal Loan is an unsecured loan and credit score plays an important role for lenders to verify your eligibility. They go for applicants with a high credit score to ensure that their loan is repaid on time. Your interest rate is also determined based on your credit score and applicants are encouraged to achieve a credit score of 700 and more to get the best personal loan terms.
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FAQs of Credit Score Vs Credit
- Will my credit card purchases be listed on my credit report?
The credit report will only include the amount of your bill and your payment history. It will not reveal the location where the credit card was used.
- What is more important; credit score or credit report?
Both of them carry equal weightage to determine your credibility. While some lenders just check your credit score, some lenders choose to go through your complete credit report before making a decision.
- Should I check my credit score or credit report?
It is advisable to check both of them regularly. It helps you prevent any fraud or identity theft. Also to correct any errors or incorrect information about your credit information.
- What is the connection between a credit score and a credit report?
A credit report is a record of your debt-handling experiences, and a credit score is a three-digit number calculated from your credit report that reflects the relative risk associated with your repayment capability.
- Will it hurt my credit score if I check my credit score regularly?
When you check your credit score, it is referred to as a 'Soft Check,' and it has no impact on your credit score. Checking your credit score on a regular basis can help you keep track of your debts and manage them effectively. You can also detect and correct any errors or misinformation in your report as soon as possible.
- Is my credit score the same with all 4 bureaus?
Not necessarily. Lenders are not required to report to all 4 bureaus and hence the information available with each bureau can be different and hence your credit score can also be different.
- When people look at my credit report, what do they see?
Your credit report contains information about all of your current and previous loans and credit cards. With complete payment history and default information.