Credit Report vs Credit Score – What’s the Difference?

If you have questions about credit reports and credit scores, you’re not alone. These topics play a big role in your financial health but can sometimes seem complicated or even overwhelming – but they don’t have to be.

Start with these frequently asked questions to learn the basics of credit and start building a stronger financial future.

How are credit reports different from credit scores?

Your credit report is a complete record of your credit history, while your credit score is a number based on your credit report.

Credit reports include all your credit card and loan details, including account opening dates, balance and payment history, and any late payments or defaults. Your credit report also lists the latest credit checks and closed accounts.

What is a credit score?

Your credit score is a number based on information from your credit report that assesses your creditworthiness. Simply put, it’s an assessment of how likely you are to repay a loan.

Credit scores range from 300 to 850. The higher the score, the better.

How can I see my credit file?

You can check your credit report for free. The three national credit bureaus: Equifax, Experian and TransUnion, are required to provide you with a copy of your credit report once a year – and all you have to do is ask.

A website called is a great way to request your credit report. The website is sponsored by the federal government and allows you to request copies of your report from the credit bureaus all at once or stagger your requests throughout the year.

If you want to see your credit score, Credit Karma gives you the option to view your score for free.

Some financial institutions also offer the ability to view your credit score and complete credit reports for free. Check with your financial institution to find out about their offers.

What affects a credit score?

Your credit score is based on:

  • Your payment history – whether you repay your loans and bills on time.
  • The portion of your available credit that you are using, also known as the credit utilization ratio.
  • What types of credit you have – such as car loans, student loans, and credit cards.
  • How long you have had your credit – the age of your credit accounts.
  • Recent serious credit checks – such as when you apply for a loan or open new credit.

Your credit score is not based on:

  • Your job
  • Your income
  • Your savings and investment accounts
  • Spouse’s credit score

Why is my score important?

Credit scores are used for a variety of reasons, most commonly by lenders when applying for a loan or a credit card.

Lenders look at your score to determine if they’ll approve your application and what interest rate you qualify for. Generally, higher credit ratings mean more competitive interest rates and more generous terms.

Other institutions may also check your credit to assess your creditworthiness, including insurance companies, cell phone companies, utility companies, landlords and potential employers.

How to create a credit?

If you’re just starting out in your financial life, you may not have a great credit history. However, there are many products and services that can help you lay a solid foundation and start building your credit.

For example, opening a low-limit card and paying it off every month is a great way to build your credit history while avoiding fees and interest payments.

If you don’t yet qualify for a regular credit card, consider a secured credit card, which is specifically designed to build or rebuild your credit. With a secured card, you provide a refundable deposit that ensures you don’t spend more than you can repay.

Another popular option for obtaining credit is to obtain a co-signed loan, such as a personal loan or a student loan. A co-signer guarantees that they will repay the loan if you cannot. A co-signer must be a trusted friend or family member, usually a parent or other close relative.

How can I improve my score?

Good credit habits can improve your score as well as your overall financial health. Raising your score may take time, but persevere and you will see results.

  • Pay your bills on time. This includes credit cards, loans, cell phone bills, utility bills – everything!
  • Keep your credit utilization below 30%. This means that if you have a credit card with a $1,000 limit, try to keep your spending card below $300.
  • Do not close accounts. The length of credit history affects your score, so don’t cancel cards or close accounts unless you need to.
  • Avoid multiple applications. Your score is affected by each credit application, which happens when you apply for a loan or a credit card.

Financial Corner is a direct response to student requests for more information on money navigation. Advice is provided by Kristi Cutts, Manager of the UW Oshkosh Branch of UW Credit Union.