How is credit score different from credit report? An explainer

If you are looking to borrow a loan and apply for the same with a bank or NBFC or fintech app, it is vital to know that the lender, invariably, would check your creditworthiness. This is typically done by checking your credit score.

What is a credit score?

It is a three-digit number between 300 to 900 that shows how creditworthy an individual is based on his payment history. The higher the credit score, the better it is. This means someone with a score of 750 would have a greater chance to procure a loan (because of his probability of loan repayment) over the other person whose score is 500.

What is a credit report?

Credit report is the detailed report which indicates payment history and other details that lead to credit score. For example, credit report entails payments made towards credit card bill and EMI towards repayment of loan.

How is a credit report different from credit score?

Unlike a three-digit number, a credit report is a detailed record of your credit history. It’s similar to an academic mark sheet that shows your past and present borrowing behaviour.

It is prepared by credit bureaus such as CRIF High Mark. The report lists a number of details which includes your personal information (name, PAN, address), loan and credit card accounts, payment history (on-time or missed EMIs), credit limits and utilisation, defaults, settlements, or write-offs. This also includes inquiries made by lenders.

Essentially, it tells the banks how you have handled credit in the past whether you are dependable or a potential risk.

Disclaimer: Mint has a tie-up with fintechs for providing credit; you will need to share your information if you apply. These tie-ups do not influence our editorial content. This article only intends to educate and spread awareness about credit needs like loans, credit cards and credit scores. Mint does not promote or encourage taking credit, as it comes with a set of risks such as high interest rates, hidden charges, etc. We advise investors to discuss with certified experts before taking any credit.

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