What is the difference between a credit score and a credit file?

If you’ve been researching your credit score, you may have come across the term ‘credit file’. If you’re wondering what exactly a credit file is, and how it’s linked to your credit score, you’ve come to the right place. A credit file is basically a report of your financial information and history that is used to help calculate your credit score.

Your credit report is constantly changing, which means your credit score can change too based on what is listed. Your credit report can also be used by lenders when they are considering any loan or credit application that you have lodged.

Read on below to find out more about the differences between a credit score and a credit file.

What is the difference between a credit score and a credit file?

Your credit report contains detailed information about your credit history, while your credit score explains your creditworthiness as a single number. It’s entirely possible that two different people could have the same credit score while having completely different information listed in their credit file. The information in your credit file is generally used to calculate your credit score, as it provides a detailed look into your financial history.

What is a credit score?

Your credit score is a number that lenders use to rate your trustworthiness as a borrower. Generally, your credit score represents the information on your credit report.

The higher your credit score is, the more likely you may be to have your loan or credit application approved. A higher credit score may mean that you are considered to have a good credit rating, while a lower score may mean that you have a worse credit rating.

Your credit score can be used as a vital tool when trying to understand where your credit health. Both positive and negative financial information can be included in your credit report, and this information is then used to calculate your credit score.

What is a credit file?

A credit file, sometimes also referred to as a credit report, is a summary of your financial history.

A credit history provides an overall image of how you use your credit, and how you have in the past. If you have ever owned a credit card or taken out a loan, you will have a credit history. Your credit file may include information such as loan inquiries, current loans, defaults or judgements, bankruptcies, and details about your repayment history. This information is used by credit providers when reviewing your credit applications.

Your credit report may include:

Your personal details – These may include your full name, date of birth, length of time at your current address and employment history
Details of credit – Such as loans that you have had in the past
Loans and applications – These could include details of applications in your name for credit or a loan, including the number of times that you have applied
Your repayment history – These may include a history of any credit or loans in your name
Outstanding balance – This could detail any overdue account payments that you have
Legal action – This may include information regarding any bankruptcy or court judgments that you have

All of these factors could be taken into account when working out your credit score.

How is my credit score calculated?

Your credit score is usually based on the financial information that’s kept in your credit report. For example, your credit file may include:

The amount of money you’ve borrowed in the past
The number of credit applications you’ve made
Whether you make your repayments on time
Any defaults of judgements against you

Depending on the credit reporting agency, your score will be between zero and either 1,000 or 1,200.

Your credit score will relate to a five-point scale (excellent, very good, good, average and below average). This helps any lender you apply for credit to decide if you will be a risk to lend to or not. A higher score may mean that the lender will consider you less risky, which could mean that you get better loan terms. A lower score may affect your ability to get a loan or credit, depending on your lender and your financial history.

How we can help

Tiger Finance can help you to find out your credit score. Try our credit score calculator today to find out your numbers. If you’re looking for a loan, we can help to get you funded in four easy steps. You will have a free consultation with one of our specialists, and we will tailor-make you a loan. We will negotiate with lenders on your behalf before you are approved. Call to speak to one of our loan specialists today for your free consultation.