At one time or another people often interchange the word credit score with credit report. Credit report is a snapshot of your credit history. Your credit report has your personal information, the kinds of credit that you use such as credit cards, credit line history and some other negative marks such as bankruptcy. It also contains if you pay your bills on time or if you are always late in doing so. The law has allowed you to have access on your credit report and gives you a once a year free copy. One thing that you need to do to ensure that your credit report contains the right information is to monitor it on a yearly basis.

If in case you are planning to file for a huge loan and you have a bad credit score you need to ask for a quarterly copy. This is true if you are making an action to improve your credit scores. Credit scores on the other hand are scores that range from 300 to 850 which is from the lowest to the highest. They are seen in your credit report. The most commonly use scoring model is the one that FICO (Fair Isaac Corporation) uses. Next one is the VantageScore which is the brainchild of the three major credit bureaus.

The major credit bureaus are Experian, Equifax and TransUnion which the law has assigned to closely monitor your credit report. In theory, all of the bureau should produce the same credit report but the reality is that since some companies prefer to report on one or two credit bureau only, the outcome is not as ideal. When prospective creditors look into your credit report, they usually get the average result to arrive at the decision on whether they will lend you that loan or not.

Credit scores are useful for your most of your loan and credit applications. Right now even potential employers and landlords are joining in the line to base their decisions on your credit report. Your credit score is what indicates whether you will be seen as a credit risk or not. No one knows exactly how credit scores are calculated but we are given some factors that play a vital role in determining how high or low your credit scores will be. If you pay your bills on time, you got a long credit history, have your new credit applications, available credit lines and a mixture of different types of credit, this will give you a good credit score.

In summary, your credit score is not just your average numbers but the basis and the lifeblood of your credit report. Your credit worthiness depends on your credit report that contains your credit scores so better take care to see to it that you have done your part in improving them. If in case you got a good credit score right now, you can still make your scores better until it reaches an excellent footing. Good credit scores can open doors of opportunities for you that were otherwise close when you got a bad credit score.