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Credit Report Trumps Credit Score

Credit Report Trumps Credit Score

A new study shows that the majority of American consumers mistakenly believe that their credit score is the most important thing in regard to financial matters.

However, the truth is that the credit report is what really matters.

While the credit score is important, it is more important to show exactly how you got to that number. The real key element in obtaining credit is your credit report. That is why it is important to ensure that you have no inaccuracies on the report because otherwise your credit score will begin to suffer.

This can have a huge impact on your finances. Incorrect negative information can mean that you need to pay more for insurance and you may find it difficult to purchase a home or even borrow money whether that be as a loan or on a credit card account. However, the good news is that this negative information can be changed either by having incorrect information fixed or by changing your financial habits.

Some of the main reasons which the report listed for paying more attention to your credit report rather than your credit score are as follows.

  • A credit score cannot be disputed. However, your credit report can be disputed if you believe the information held is inaccurate.
  • Credit scores differ from agency to agency, but your report will always be the same. This means that credit reports are much more accurate.
  • Credit scores are only a representation of your credit report which is where the real information is to be found.
  • Insurance companies will focus on your credit report rather than your credit score.
  • Potential employers will have access to your credit report rather than your credit score.
  • The credit report allows you to quickly and easily spot identity theft.

Under federal laws, individuals can access one report from each of the top three credit reporting agencies in the United States every year totally free of charge. The three major credit reporting agencies in the country are Experian, TransUnion and Equifax.

When an individual first obtains their credit report they need to look carefully and note any discrepancies that may be present. It is then important to dispute these errors by contacting not only the reporting agency, but also by getting in touch with the company who provided the information, for example your credit card issuer or loan provider.

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