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What is a credit score vs. a credit report?

A credit score is a 3-digit number generated by a mathematical formula that is meant to predict credit worthiness. Credit scores range from 300-850. The higher your score is, the more likely you are to get a loan. The lower your score is, the less likely you are to get a loan. If you have a low credit score and you do manage to get approved for credit then your interest rate will be much higher than someone who had a good credit score and borrowed money. Therefore, having a high credit score can save many thousands of dollars over the life of your mortgage, auto loan, or credit card.

Simply put a credit report is a record of your credit history. It contains positive information like on time payments, and negative information like items in collections. A credit report is a neutral document; it shows a record of your behavior. But it is important for the information contained in your credit report to be accurate so that your credit score reflects your actual credit behavior and so that potential lenders get an accurate picture of your credit history.

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What is in a credit report?

Although each consumer reporting agency publishes and reports this information differently, all credit reports contain basically the same categories of information:
Personal  Identifiers - Your name, addresses, phone numbers, Social Security number, date of birth and employment information are used to identify you. These factors are not used in credit scoring. Updates to this information come from information you supply to lenders.
Trade Lines - These are your credit accounts. Lenders (also known as data furnishers) report on each account you have established with them. They report the type of account (bank card, auto loan, mortgage, etc.), the date you opened the account, your credit limit or loan amount, the account balance, and your payment history. However, it is the individual company's prerogative whether to report accounts to the consumer reporting agencies or not, so you may have an account with a creditor that you do not see reporting on your consumer report.
Credit InquiriesWhen you apply for a line of credit such as a loan, a credit card, etc., you authorize your lender to pull a copy of your credit report. This is how inquiries appear on your credit report. The inquiries section contains a list of everyone who accessed your credit report within the last two years. The report you see lists both “hard” inquiries, initiated by your own requests for credit, and “soft” inquiries, such as when lenders order your report so as to make you a pre-approved credit offer in the mail. Soft inquiries do not impact your credit score in any way.
Collection Items - these are past due debts that creditors have either contracted with a collection agency to collect on their behalf, or have sold to debt buyers who in turn attempt to collect the debt from you.

Public RecordConsumer reporting agencies also collect public record information from federal, state, and county courts. Public record information includes bankruptcies, foreclosures, law suits, wage attachments, liens and judgments.

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What is a good credit score?

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Credit Score Ranges - designed by me.jpg

It is generally accepted that any score over 700 is a good score. That said, there are many opinions on the topic and the definitive answer can only be given by the lender who is evaluating your credit file in relation to your application for credit. There are also many different scoring models, some are specific to particular industries such as auto lending, mortgage lending, etc., which will affect which rating your score falls into.

*The image above is based on ratings and scores from the FICO scoring model.

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What affects my credit score?

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Fact 3

In addition to credit repair, what can I do to help raise my credit rating?

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Pay all of your bills on time, every time. This includes your utility bills, mortgage and auto payments, and all of your revolving lines of credit like credit cards. 

Never charge more than 30% of the available balance on any of your credit cards. Banks like to see a nice record of on-time payments, and credit cards that are not maxed-out. If you are carrying high balances on your credit cards, then make paying them down below 30% a priority.


Use your credit cards – many people who make mistakes with their credit believe that the best way to fix things is to never use credit again. If you are afraid that you cannot handle your credit cards correctly then the best policy is probably this one: Run only your utility bills on your credit cards each month, and then pay the balance in full by the due date. This ensures that your utility bills get paid on time automatically, and as long as you keep the habit of paying off your credit card balance each month your score will continue to go up. Leave the credit cards locked in a safe or drawer at home.

Keep your accounts open as long as possible – even if you are no longer charging on the card. The best policy is to keep those unused accounts open, blow the dust off your card every few months to make a small purchase, then pay it off. How long each of your accounts have been active is a major factor in your credit score.

Remember that this all takes time – following the above steps consistently over a long period of time will increase your credit score and allow you to qualify for better loans and lower interest rates.


Repairing your credit score is not an overnight process. If you do these things for a few months and do not see a large increase in your score, do not give up. These are all habits that you will want to maintain throughout your life, as they will help you to keep your finances and lines of credit under control and they will help you to achieve and maintain a good credit rating.

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How long do items stay on

my credit report?

  • Delinquencies (30- 180 days): A delinquency will report for seven years; from the date of the initial missed payment. 

  • Collection Accounts: Report for seven years from the date of the initial missed payment that led to the collection (the original delinquency date). 

  • Charge-off Accounts: This will report for seven years from the date of the initial missed payment that led to the charge-off (the original delinquency date), even if payments are later made on the charge-off account. A delinquent account is generally classified as a charge-off when the account is sent to a collections company.

  • Closed Accounts: Closed accounts are no longer available for further use and may or may not have a zero balance. Closed accounts with delinquencies remain for seven years from the date they are reported closed, whether closed by the creditor or by the consumer. Positive closed accounts continue to be reported for ten years from the closing date.

  • Bankruptcy: Chapters 7, 11, and 12 will report for ten years from the filing date. A Chapter 13 is reported for seven years from the filing date. Accounts included in a bankruptcy will remain for seven years from the filing date and should be reported as discharged in bankruptcy.

  • Judgments: Report for seven years from the date filed.

  • Tax Liens (City, County, State, and Federal): Unpaid tax liens report for fifteen years from the filing date. A paid tax lien will report for ten years from the date of payment.​

  • Inquiries: Most inquiries report for two years. All inquiries report for a minimum of one year from the date the inquiry was made. Some inquiries, such as employment or pre-approved offers of credit, will show only on a personal credit report pulled by you.​

Fact 5

How often is my credit score updated?

Your credit score is fluid - that is it gets updated every time a data furnisher, or creditor, updates the account information they report on you. So, for example, when a balance changes, an account status changes or a new account is added (or removed), your score is updated. However, your ability to see that change, if you're monitoring your credit score, is dependent on how often the monitoring service you are using updates the information in their systems. Some monitoring companies update once a week while others may not update more than once every 30 or 35 days.

Is a credit score the only thing lenders look at?

Lenders look at more than credit scores. The score plays a large factor, but so does your full credit report—sometimes from one bureau, sometimes from all three. They may also look at your annual income and your debt-to-income ratio or overall debt in addition to other factors.

How will my score change if I open or close accounts?

At first glance, it may seem like a good idea to close old credit accounts or open a host of new ones. But it’s not. More accounts can hurt, not help. Financial experts agree that you should not open multiple new accounts just to show a credit history. If you have had little credit in the past, build your credit history slowly. Open no more than one or two accounts initially. Also, don’t close your old accounts. A long credit history has a positive impact on your credit score. Having a large number of accounts in good standing with zero balances is a plus, not a negative.

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