What Is The Basic Difference Between A Credit Score And A Credit Report?

Credit score and credit report are two primary components for checking your financial growth. However, credit reports and credit scores are two different components and shouldn’t be considered the same. But a credit score is measured based on your credit report.

A credit report is a financial statement that provides information about your credit activity along with other information like loan paying history and the status of your credit accounts. On the other hand, a credit score is a three-digit numeric range from 300-900, and an ideal credit score should be above 750.

Your credit score and credit report are significant in analyzing your financial health. The report or score indicates good monetary health that acts as criteria for getting a quick personal loan. However, it would be helpful if you had a credit score above 750. The article will put forth pointers on the importance of credit score and credit reports and how you can check free credit score.

Importance Of Credit Score

The significant similarity between credit score and credit report is that both components monitor the detailed history of your entire present and past credit history. They track if you have any discrepancy reports or write-offs or if your account has gone through a hard inquiry.

The importance of a credit score is highlighting the faults in your credit score and providing other advantages. The advantages are –

Information – Credit scores and reports provide information that later becomes one of the primary reasons for a good credit score. When you check the score and report analysis, if you see an error, not from your end, you  can immediately raise a dispute. While you raise a dispute, you have to report the errors to the concerned authorities. If you monitor free credit scores online, you will be informed about the flaws in your credit score and report along with practical tips to improve it. Free credit score resources suggest tips to improve your credit status even if the flaunt is from your end.

Curtails forgery –

The prospects of any credit fraud and theft are curtailed during the analysis process. Therefore, if you constantly analyze your credit score, you might encounter loopholes that are not the outcome of your financial activity.

Hence, that’s why you should constantly monitor your credit score. You can also monitor your free credit report online, but you can download the report once a year.

Free credit score and report –  While monitoring your free credit score and report mainly, you are notified with alerts if any significant activity like credit inquiries, history or negative information is found.

Hence, when you have facilities to check your free credit score and report, it will be better if you don’t opt for the paid ones. The article will further discuss how you can check free credit scores and the fundamental difference between a credit score and a report.

Also Read: Types of Credit Scores and Its Importance in India

Difference Between Credit Score And Credit Report

 Information – A credit report mostly shows the details of a customer, their credit summary and records of bankruptcy etc. At the same time, your credit score is analyzed based on your credit history.

Different credit scores – There are many ways to find a credit score; this score can differ depending on the credit reporting agency. The type of information the credit score agency provides influences your credit score.

Errors – Errors on the credit report can potentially reduce your credit score artificially, which means a higher interest rate and less money in your hand. Therefore, you should monitor your credit report every year to rectify errors before applying for a loan. You have to ensure that you know the flaws of the credit score before your lenders get to know it.

How To Check A Free Credit Score?

You can follow the following tips to check your credit score–

1. You can log in to the official credit score website online.
2. Then you can select under your preferences if you want to get the report of “annual credit score,” then select that option.
3. To get your credit report, you must type your name, email id, and password.
4. Attach your ID proof,i.e.,- password number, PAN card. Adhaar or Voter ID)
5. Your PIN code and DOB information, along with your number, should be mentioned.
6. After providing all the details mentioned above, you have to click “Continue” to proceed with the next step.
7. As part of the authentication process, you will receive an OTP on your phone— continue the verification process by typing in the OTP carefully.
8. After you have enrolled, you will be directed to the website, where you will provide the ‘member login’ credentials. And hence, your credit score should be right on your screen.

Also Read: Improve Your Credit Score With A Personal Loan Using These Tips

Summing up

Having a good credit score is very important as it provides you with better loan deals, and further, it also anticipates good financial health. Constantly checking free credit score and credit report and ensuring constant steps like paying off loans on time etc., will help you establish a good credit score. Hence understanding the difference between credit score and report and checking it should bring you good results.

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FAQs

Q. How to get and keep a good credit score?
A. There is no secret formula to creating a solid credit score. However, you can take some conscious steps like – Paying your loans on time and monitoring your credit score regularly.

Q. Where can you check your credit score?
A. There are ample free credit score monitoring resources available, but you can use buddy score. It provides the most scrutinised and analyzed credit report and is very user-friendly.

Q. Can you get a personal loan with a low credit score?
A. You can avail of a loan with a low credit score. But if you might be asked for a higher interest rate.