www.experian.com consumer

 

www.experian.com consumer

www.experian.com consumer

www.experian.com consumer

Credit Report Versus Credit Score: What’s the Difference?

  • ◾ Your credit score is a three-digit rating that quantifies your credit risk. Among other uses, lenders reference this number to help assess your creditworthiness; a higher credit score indicates less risk.
  • ◾ Your credit report details your credit history. Individuals who feel that their credit score is incorrect should look for inaccuracies in their credit report. You can correct erroneous information in a credit report that results from misinformation or identity theft by disputing your credit report.
  • ◾ Qualifying for discounted or free credit reports: You may be eligible to receive a discounted or free credit report if you meet certain conditions. Check to see if you qualify. Credit scores are not included in the credit report, but you can request a credit score as an additional service.

Why is it important to check your Experian credit report regularly? Many people frequently pay attention to their credit scores when they buy big-ticket items such as a new car or a home. While these are some of the most familiar reasons consumers monitor their credit reports, credit scores and reports actually are used for many other reasons as well. A good credit score can get you better rates on common necessities such as car insurance premiums, cell phone contracts and apartment rental agreements. Some employers even check prospective employees’ credit reports before making final hiring decisions. In addition, despite increased public awareness of identity theft, the crime continues to grow. Therefore, monitoring your credit report and score has never been more important. Take the first step to protect your family’s financial history by ordering your credit report today.

What’s in a Credit Report?

Accounts

Accounts in your credit report can include credit cards, retail credit cards, real estate loans, installment loans, such as auto loans, and collection accounts. Your creditors report different information to the credit bureaus and may also provide their contact information in your credit report. 90% of the credit score calculation is based on how you manage your different accounts as reported by your creditors.

Inquiries

Hard inquiries are the result of your application for credit or other services, and stay on your credit report for 25 months. These type of inquiries can represent additional debt that doesn’t yet appear as an account in your credit report, and this potential new debt is an indicator of risk, so a recent inquiry can have a small impact on credit scores. 10% of the credit score calculation is based on how often you try to apply for new lines of credit.

The second type of inquiry is known as a “soft” inquiry because it does not affect lending decisions or credit scores. These type of inquiries appear only on your personal credit report and are not shared with anyone else, including potential creditors. A soft inquiry can include getting copies of your own credit report, purchasing a credit score and credit report for yourself, preapproved credit offers, inquiries for insurance and employment purposes, and inquiries made by your existing lenders for account review purposes.

Public Records

Public Records are financial accounts in your credit report attributed to legal actions such as bankruptcies, tax liens, and court judgments. They do not include information like arrests, misdemeanors, or other non-financial situations. These types of records on your credit report damages your credit score.

  • ◾Bankruptcy: Under Chapter 13 bankruptcy, a person repays at least a portion of their debts. Chapter 13 bankruptcy remains in your credit report for 7 years from the filing date. Under Chapter 7 bankruptcy, a person does not repay any of the debts included in the filing. Chapter 7 bankruptcy remains in your credit report for 10 years from the filing date.
  • ◾Tax Lien: This results from failure to pay your taxes in most cases. An unpaid tax lien will remain on your credit report for up to 10 years from the filing date. A paid tax lien is deleted 7 years from the date it is paid.
  • ◾Civil Judgements: This results from a debt you owe through the courts as a result of a lawsuit. Once paid, this record will be updated to show that fact.

In general, creditors forward information to the credit reporting agencies monthly. The day of the month that each individual creditor sends updates varies. In other words, we might receive an update from creditor A on the first of every month and from creditor B on the 11th of every month, etc. This is why it’s important to have access to your credit report every day.

Stay on top of your credit and get your credit reports and scores from all 3 bureaus today!