Credit Report and Score

You know that your credit report and score are used by bank lenders to judge whether or not they should lend you money. Your credit report and score shows them your financial position. The difference between the two is that your credit score is a three digit number based on the data provided by your credit report. Your credit report shows your payment history and how much you owe etc. Credit scores usually range from 300-750, any score above 700 is regarded by bank lenders as excellent.

It is common for people to be confused or mislead about what does and does not affect your credit score. You should know that your credit report and score has nothing to do with your salary; it only reflects how well you handle the credit available to you and whether or not you pay your bills on time. If you are married, your credit report only reflects you and is separate from your spouse. If you have jointly borrowed money, it will show up on both reports separately and will affect both of your scores. If you get divorced you must still pay your joint loans or both of your scores will decrease.

It is important to keep track of how many credit cards you have because credit bureaus like to see that you are using as little of your available credit as possible. The more credit cards you have, the more money you are likely to owe. Even if you cancel an unused account, it may look like you are using a larger portion of your available credit which will actually raise your score.

If you do not know your credit score, you can obtain a copy of your credit report by requesting it from the credit bureau. There are three main credit bureaus, Experian, Trans Union and Equifax that maintain you credit report and keep track of loans, credit cards and bankruptcies and whether you pay your bills on time. Checking your credit report will not lower your credit score and you can do it for free at annualcreditreport.com.

Each bureau keeps track of financial transactions independently of the others and may not have the same amount of information as the other bureaus. If you were to contact each bureau separately to obtain your credit score, your result may be three completely different credit reports.

Luckily, annualcreditreport.com is one centralized website for all three major credit bureaus so you do not have to contact each bureau separately. It is important to see your report because the easiest way to manage your credit is to know your credit report and score.