Your “credit report,” and the “credit score” based on that report, are very important and can have a significant effect on your financial well-being including determining the interest rate you pay on loans and credit cards and whether you even qualify for a loan or purchase.  The terms “credit report” and “credit score” are often confused.

A “credit report” is a list of all information provided to the three major credit-reporting companies – Equifax, Experian, and TransUnion – related to your loans, purchases and other financial transactions.  You are entitled to a free credit report once a year from each of these three reporting companies.  You should never have to pay for your annual credit report, as it is available for free from

Your “credit score” is a number assigned by the three national credit bureaus based on the information contained in your “credit report.”  When you apply for a car loan, a home mortgage or a credit card a lender will usually check your credit score.  Based on that score, as well as other information, the lender will then approve or deny your application.

There is not just one way that your credit score is determined and each credit agency will use its own particular system.  The most commonly used systems are FICO and VantageScores.  Both of these scoring methods use a scale going from 300 to 850.  Below is a chart giving general guidelines on interpretation of a credit score.

While you can get a free “credit report,” you typically cannot get your “credit score” for free.

In addition, if you do purchase a credit score, it may be different from the one used by a creditor to make a decisions about your creditworthiness.  If there is incorrect information in your “credit report” it can have a negative impact on your “credit score” and you can suffer as a result.  Therefore, you need to check your “credit report” regularly and take action of it contains incorrect or incomplete information.


By:  Edward Angwin, February 20, 2017

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