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Credit reports and scores

Get informed on the roles and relationships between credit reports, scores and bureaus.

Chapter 4: Credit reports, credit scores and credit bureaus

This part of the conversation explains the relationship between credit reports, credit scores and the credit bureaus. The video gives a good overview and, in conjunction with the Credit Myths: Discredited Worksheet , may help you make informed decisions on how to improve and protect your credit score.

03-04-2019

Video Transcript

What are the major credit bureaus?

There are three major credit bureaus: Equifax, Experian and TransUnion. Each bureau creates its own version of your credit report and may have different information because they only reflect what information is shared with them. Not all entities report information to all credit bureaus.

Monitor your activity and credit by checking AnnualCreditReport.com . Be sure to look at both your credit report and credit score. Checking these will help you monitor, adjust and plan to make the changes you need to improve your credit score. There are ways you can budget and make adjustments to improve your credit relatively quickly.

Takeaways on credit reports

  • Look at the different types of credit on your credit report (revolving credit, installment credit, judgments, liens, collections and who has been inquiring on your credit).
  • You can calculate your mid-score by looking at all three credit reporting agency scores and then taking an average of all three scores.

Takeaways on credit scores

  • Your credit report ultimately determines your credit score. 
  • Your credit report contains information about your history of payments, credit utilization ratio and other items. 
  • Your credit score is a synopsis of your financial history.
  • The higher the credit score the better.
  • Credit inquires make up to 10% of your score.  
  • There are two types of inquiries (soft and hard). Hard inquiries may hurt your credit, while soft inquiries typically don't make an impact. 
  • Unless you and your significant other have joint accounts, your credit report and credit score are yours and yours alone.

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The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.




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