Credit Reports – Credit Scores

By: Ray Kirk, Ph.D., Federal Benefits Specialist

Published: April 22, 2019

Banks, car dealers, credit card companies, newspaper columns all talk about credit scores and credit reports. Do you know how they differ and what they are used for?

A credit report chronicles your credit history — a credit score predicts your credit future.

A credit report is the detailed history of your credit use and repayment patterns. A credit score is a single number, based on an algorithm, predicting your credit risk based on the information in your credit report at one point in time.

Credit reports gather information from a variety of sources and present it in one place creating a track record of how much money you owe and how much credit you have available on your credit cards. Credit reports provide information on current and past credit accounts and debt, third-party collections, certain public records, and requests by lenders for the credit reports. The reports include the dates accounts were opened, loan amounts, current balances, and payment history, including late payments or defaults. Three credit bureaus (Equifax, Experian, and TransUnion) independently gather and maintain the data.

A credit score is a three-digit number between 300 and 850 calculated based on the information in your credit reports gathered by each credit bureau. The credit scores are used by lenders to predict how likely a person is to pay back credit obligations. Usually, a person with a higher credit score is eligible for loans at lower interest rates because there is less risk for the lender of not having the loan repaid. The three credit bureaus as well as some banks combine payment history, amounts owed, length of credit history, and new credit to arrive at the score.

Your credit report can be a crucial factor in how lenders determine whether to approve you for a new credit card, a mortgage, or a car loan, as well as the interest rates and terms that will be offered. Not only that, but employers often request a credit report before making a job offer. Credit reports are also reviewed as part of background checks and security clearance reviews.

As a result of the 2003 Fair and Accurate Credit Transactions Act, all Americans are entitled to a free credit report every year from each of the three major credit-reporting agencies: Equifax, Experian, and TransUnion.

You can request your free credit reports at:

The Federal Trade Commission has excellent information about credit reports at:

Dr. Kirk is a former Federal employee with over 40 years of Federal service, 34 of which were spent with the Office of Personnel Management. He was the manager of the Benefit Officers’ Training and Development in Retirement Services for the last 12 years of his career. He is a seminar presenter for NITP.