Confused about the difference between your credit report and credit score? The two may look more or less the same to new users.
Credit Report and Credit Score – Difference
As the name indicates, a credit report is a statement which has your credit details such as the credit score, credit history (debt accounts and their payments), the number of credit accounts owned, the mix of secured and unsecured loans, length of credit history (how old are your loan accounts – the older, the better), etc. Along with it, it will have your personal details like your PAN, full name, employer information, etc.
A credit score is a statistically generated three-digit number between 300 and 900. This number is a summary of your credit report. If you have been handling your credits fairly well, your credit score will be good (generally above 700).
Who Provides Credit Reports and Credit Scores in India?
In India, credit reports are provided by various institutions, but the most commonly used is the one provided by CIBIL TransUnion.
Note: At Paisabazaar.com, you can check your updated CIBIL score for free in a minute and the score thus reflected mirrors the one displayed at CIBIL’s official website.
Other leading credit reporting organizations that currently operate in India include High Mark Credit Information Services, Experian Credit Information Co. of India and Equifax Credit Information Services. Apart from these agencies that operate in India currently, more companies may be allowed into the Indian market in the recent future. For simplicity and because it is the most commonly used one, we mainly consider the CIBIL TransUnion credit report and the corresponding credit score as the one being discussed.
Connection between Credit Score and Credit History
There is a direct connection between your credit score and credit report. If your credit report is good, so will be your credit score. A lot of red flags in your credit report are very likely to lower your credit score.
A higher credit score on your report represents a lower credit risk for new loans provided to you and vice versa. Therefore higher your credit score, the greater is your creditworthiness as determined by the lender and the lower the perceived risk of lending you more money. So while your credit report contains your entire credit history, your credit score is a summation of the same and acts as a snapshot of your credit history with respect to all past and current debt instruments.
When you apply for a loan or credit card, it is quite likely that the prospective lender will check your credit score. It will help them determine the prospective borrower’s credit risk. The closer your score is to 900, the more will be the chances of your loan or credit card application being approved by the bank.
How to access Credit Report and Credit Score?
You can easily check your credit score as well as your credit report for free at Paisabazaar.com. These can be checked anytime and information processed is completely reliable as the data is fetched directly from credit bureaus, viz. CIBIL, CRIF High Mark and Experian.
Note: Currently CRIF High Mark and Experian scores are not being updated temporarily. However, your CIBIL score is updated regularly. Also, most of the banks check CIBIL score when reviewing a loan or credit card application.
To check your updated credit score and report, simply click on the following banner and you will be redirected to the Paisabazaar online portal. Enter basic details (Your name, PAN, mobile number etc.) and click on “Get Your Credit Score”.
Keep checking your credit report regularly for any possible errors, make payments on time and avoid using more than 30% of your total credit card limit, to ensure that your credit score doesn’t go way down compared to the average score.
In a nutshell
A credit report is a report card of one’s debt history which includes a range of personal information such as name and address, PAN card details, contact information, etc. It will also include your loan/credit card details, accounts opened/closed, current balances, loan settlements (if any), hard inquiries made, etc.
On the other hand, credit score is a numerical representation and summary of your relationship to credit. Credit scores are calculated after analysing a person’s debts against credit limits across all loan amounts, history of debt repayments, number of accounts, and the overall credit history.