Each one of us has credit history profile data kept by each of the three major credit reporting bureaus which routinely collect and maintain vital information about your borrowing behavior, and use it to compile your credit report.
This report is essentially the blueprint of your credit history; which is why your credit report is one of your most important assets.
Your credit score, on the other hand, is computed based on a subset of information within your credit report which a lending institution will use along with other factors when determining your creditworthiness. That’s why the real key to credit is your credit report.
Here are a few bits of trivia to help you understand why your report matters more than your score and why you focus on your report rather than your score
Credit scores are a reflection of your credit report.
It’s like your grades in school; you do well in your academics and you get a good grade. Those grades are simply a reflection of your academic performance. Your credit score is just a reflection of your financial performance, which in turn is concretely laid out on your credit report.
You can dispute your credit report but not your credit score.
If you think any part of your credit report is inaccurate or incomplete, then you can formally send a complaint to the credit bureaus. You can present receipts of payment and other documents to prove your point. Credit scores, on the other hand, are just numbers that you have no objective basis for disputing at all. If you want to know why your score just dropped a hundred points, then you will end up having to review your credit report just the same.
Credit reports are consistent; your scores aren’t.
Your ability (or failure) to follow through on your financial obligations will be reflected on your report, but the effects will vary depending on what credit bureau you get your score from. This is because credit reporting agencies have their own methods of calculating scores. While the score ranges are typically similar, even slight differences can keep you on or knock you off a credit score range.
Employers and insurers look at credit reports and not the scores.
Your credit report is a more reliable measure of your personal responsibility and ability to smartly handle money than a set of numbers. This is why employers and insurers are granted access to a person’s credit report, and even that report is edited to filter out private data. A flattering credit report can then be considered a useful asset for those looking for leverage in job hunts and career shifts.
Credit reports can help you identify potential errors or fraud.
If your credit score is down, oftentimes you won’t know the reasons why – much less realize that something is wrong. If there is a suspicious item in your credit report, however, then you can easily pinpoint where the trouble is. This will allow you to check if there has been an error in the bureaus or if you have actually become the victim of identity theft.
Remember: your score is only a reflection of your report, and that report will tell you where you did well and where you went wrong. Keep all this in mind and you will quickly realize that credit reports are much more important in your life.