Credit Score/Credit Report

I know this is something that we hear quite frequently in our day of borrowing money and identity theft.

First lets go over the two terms

Credit Report
A credit report is a list of your credit transactions typically including loans, credit cards or other money borrowed from an official lender. The report has different sections of information that you can review, it may include; a credit summary, detailed account information, inquires made by lenders, any accounts turned over to collections, public record information, and information on your file disputes. In summary it is your history of how you interacted with your lenders and how you managed your accounts.

Credit Score
Using a summary view of a credit report a person receives the all elusive Credit Score. This is a number that is used to predict your credit reliability based on your past experiences. A high credit score suggests that you are a reliable person that has been good with creditors in the past and should continue to do so.

With the two terms better in mind we will talk about what they do. First the Credit Report is a useful tool to you the consumer to get an idea about what things might have and affect on your credit. You get to see your past accounts and check if any information might be suspect. These reports have become an important tool in protecting yourself against identity theft to check that you don't have accounts that you don't know about. For the most part the consumer uses the report or the agencies that give a credit score use it.

Second the credit score, lenders are going to be using this and not the credit report. They don't need every detail of your past experience they simply want to have an idea about the risk they are taking by giving you money. Remember high numbers typically will get you better interest rates and will help you be accepted for a loan.

That is a little bit of explanation about the two Credit watch dogs.