A credit score and credit report are two different things. The credit score is determined by your credit activity. However, your report includes information about your payment history. In this article, we will discuss the differences between these two documents and how they are different from one another. This article will also give you some insight into the role of your payment history in your credit score. Read on to learn more! Below are the key differences between credit scores and credit reports.
Differences between a Credit Score and a Credit Report
You might have heard of credit score but are not sure how they can be understood. There are some major differences between a credit score and a credit report. Your credit score is a numerical analysis of your financial history that is based on your past behaviour. A credit report provides a comprehensive view of your financial history. However, a credit score gives lenders a single number to determine if you are a good candidate for credit.
Credit reports reveal a borrower’s past history of borrowing money, and how they have repaid it. Lenders use credit scores, which are three-digit numbers, to determine a borrower’s creditworthiness. Your credit report will include a list and age of all accounts. There may be negative information like late payments. Credit scores are generally excellent to excellent, but they can vary widely.
Credit report information
A credit report contains information about your financial history. It includes information such as how much you have borrowed, repaid and how many accounts you have opened or closed and whether you have had delinquent payment. This report also contains information about whether you have ever applied or received credit. This information could remain on your record for years. Financial institutions use this information to decide whether to extend you credit. An additional person can also request a copy, such as your landlord and employer.
Your payment history is one the most important pieces in a credit report. This includes all accounts that you have opened in the last seven to 10 years, along with joint accounts that are listed as authorized users. Your credit history also includes your repayment history, including installment loans and credit cards. These items are not the only ones that will appear on your credit reports.
Credit score and impact of payment history
When it comes to your credit score, one of the most important factors is your payment history. Late payments can damage your credit score and be visible on your report for up to seven year. A few slip-ups can not harm your credit score but multiple late payments can. Your payment history is a record about your payments to all your accounts including credit cards, personal loan, and credit lines. Your payment history tells lenders how likely you are to default on your accounts.
FICO's estimate of 35% is an approximate guideline. Your actual impact may be higher or lower. A few late payments may have a greater effect on your credit history than a long history with timely payments. Refinancing the current loan could be the best decision in these cases. Refinancing your current loan could help you improve your credit score. Refinancing a car or home loan can help you improve your credit score.