Credit Report vs. Credit Score: What’s the difference?

BY THE PERK LENDING TEAM | July 28, 2023 | 3-minute read

Your credit report is a historical record of how you’ve managed and repaid your debt obligations. It contains a range of personal and financial information including:

• Your full name and any previous name used in connection with a credit account or loan

• Current and former addresses used when previously applying for credit

• Social security number

• Date of birth

• Open credit accounts and loans

• Account and loan types, limits, and outstanding balances

• Monthly payment data including late payments

• Previously closed accounts and paid-off loans

• Previous credit inquiries 

• Previous collections, liens, foreclosures, and bankruptcies 

The data in the report is compiled and stored by one of the three national credit bureaus- Equifax, Experian, or TransUnion. All three bureaus format their reports differently, but each contains essentially the same data. When applying for a mortgage, your credit report from one, two, or all credit bureaus may be checked.

What Is A Credit Score?

Your credit score is a three-digit number that lenders use to gauge how likely you are to pay your debt obligations on time. It is derived from the data contained in your credit report. Lenders usually refer to FICO, the most popular credit-scoring firm used in the United States, to obtain your credit score (also called a “FICO score”). 

Your FICO score can typically range from 300 to 850 and is calculated using five factors with different weights:

Payment History (35%)

Payment history holds the largest weight in the scoring calculation. It examines how often you make payments on-time while paying at least the minimum payment required for your credit accounts and loan obligations. 

Credit Utilization (30%)

Credit utilization measures the relative difference between the amount of credit you are using and the total credit available to you. It is presented as a ratio and is calculated by dividing the sum of all your outstanding credit balances by the sum of the credit limits on all accounts. 

Credit History (15%)

Credit history refers to how long you have had open credit accounts and loans. 

Credit Mix (10%)

Credit mix is an examination of the different types of credit accounts and loans you have. 

New Credit (10%)

New credit refers to any recently opened credit accounts or new loans taken. More specifically, it looks at any credit inquiries on your report in the past 12 months.

Just as you have three different credit reports (one from each credit bureau), you have three different credit scores. Each score, though derived from the same data, may vary slightly. Therefore, all scores may be checked when applying for a mortgage.

It is important to maintain as high a credit score as possible. A higher credit score can gain you access to a larger number of lenders, making them compete for your business. Additionally, lenders will typically offer borrowers with higher credit scores lower interest rates. Check out our guide on how to improve your credit score.

Newest Blog Posts