The terms credit score and credit report are often confused, but they refer to different aspects of your financial history. Here’s a breakdown of each:
Credit Score
Your credit score is a three-digit number that ranges from 300 to 900. It is calculated based on the information in your credit report and reflects your creditworthiness. A higher score indicates a lower risk to lenders, while a lower score suggests that you may be a higher risk. Borrowell provides the Equifax Risk Score 2.0, which is widely used by banks and lenders in Canada to assess credit applications.
Credit Report
Your credit report is a detailed document created by credit bureaus, such as Equifax or TransUnion. It contains comprehensive information about your credit history, including:
- Personal Information: Your name, address, date of birth, and Social Insurance Number.
- Credit Accounts: Details about your loans and credit cards, including balances, payment history, and account status.
- Credit Inquiries: A record of who has checked your credit report in the past.
- Derogatory Marks: Information about bankruptcies, collections, or judgments against you.
Borrowell provides access to your Equifax consumer credit report, which can be used by lenders, landlords, and others to evaluate your financial reliability.
Key Differences
- Nature: The credit score is a numerical representation of your credit risk, while the credit report is a detailed account of your financial history.
- Purpose: Lenders use your credit score as a quick reference to assess risk, whereas they review your credit report for an in-depth understanding of your financial behavior.
Both your credit score and report are crucial for financial decisions, such as applying for loans or renting property. Understanding the distinction between them can help you manage your finances more effectively.