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A credit score is simply a three-digit number that summarizes your overall credit standing and tells creditors how likely you are to either repay a debt or default on it.

A credit score is calculated based on the underlying information that is contained in your credit reports. But a credit score is not automatically included in credit reports. You generally have to pay for a credit score, whereas you’re legally entitled to get your credit reports free of charge every year.

There are a few different consumer credit scores that you as a consumer should mainly be concerned about. They are:

1. The FICO credit score
2. The Experian Plus score
3. The VantageScore

Your FICO Score

Your FICO credit score is issued by the Fair Isaac Corporation. It is a separate entity and business that is not owned by any of the three credit bureaus.

Your FICO score can range between a low score of 300 points to a top score of 850 points.

FICO scores are the most popularly-used credit scores. Anyone that is considering loaning you money, leasing you equipment, or even considering extending you a job offer or renting an apartment to you will probably want to know your credit rating or what your FICO score is.

A low score of, let’s say 550, means that you probably will be denied the credit you want. A high score of perhaps 780 will greatly improve your chances of getting the credit you want. It’s that simple.

Here are details on what factors Fair Isaac uses to determine your FICO credit score.

Fair Isaac, through their myFICO.com website, also offers consumers a wide range of  credit monitoring services which allow you to monitor your credit score for a fee. Personally, I’ve found credit monitoring to be invaluable in helping me to achieve Perfect Credit.

The Experian Plus Score

The Experian Plus is different from your FICO score. The Experian Plus Score, as the name suggests, is issued by the Experian credit bureau. Your Experian Plus score can range between 330 and 830 points.

If you pay all of your bills on time, don’t have any liens or judgements on any of your credit reports and if you have relatively low to zero balances on your credit cards, you will likely have a high Experian Plus score. The reverse is true as well: if you have multiple late payments on your record, a lien, a bankruptcy, etc., chances are your credit score will be low.

The VantageScore

The VantageScore was introduced in 2006 and formed jointly by TransUnion, Equifax and Experian.

Even though the VantageScore was created by a mutual collaboration of the three national credit bureaus, VantageScore is owned by VantageScore Solutions, LLC which acts as a holding company to the intellectual property rights of VantageScore.

Without getting bogged down in all of the legal ownership, rights, etc…here is what you need to know about the VantageScore:

• The VantageScore ranges from 501 to 990 points
• VantageScore uses a familiar letter grade associated with five different ranges within the score.
  • “A” for scores between 900-990
  • “B” for scores between 800-899
  • “C” for scores between 700-799
  • “D” for scores between 600-699
  • “F” for scores 599 and below.

So how do you get everything? If you want your credit reports and credit scores, here is the short answer:

You have to get your credit reports and credit scores separately, and it’s fastest to do it online. Credit reports are available at no charge; credit scores you have to pay for, typically about $10 to $15 or so.

You can get each of your three credit reports from the credit bureaus for free – with no strings attached – by going to AnnualCreditReport.com.

You can get your FICO score from myFICO.com.

You can get your Experian Plus score from Experian.com.

You can get your VantageScore from VantageScore.Experian.com.

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Q: Can you explain what a credit report is and how do I go about getting one?

A: A consumer credit report is a detailed file about you that has information on where you live, what debts you owe, how consistently you pay your bills, whether you’ve been sued or arrested, and if you have filed for bankruptcy. Your credit report is important because it may be examined – by anyone from employers to insurance companies – any time you apply for a job, seek credit or insurance, or even try to rent a home or apartment.

Your credit report is maintained by three different nationwide consumer reporting companies: Equifax, Experian and TransUnion. These consumer reporting agencies are commonly called “credit bureaus.”

Credit bureaus are separate companies, independent of each other, and each tracks and records your credit history. Credit bureaus also sell information in your credit files to banks, creditors, insurers, employers and other businesses.

By law, you are entitled to a free copy of each of your credit reports every 12 months from each credit bureau. The best place to get all three reports from one source is AnnualCreditReport.com. Alternatively, you can get your credit reports from each individual credit reporting agency:

Where to get your credit report:
http://experian.com
http://transunion.com
http://equifax.com
http://annualcreditreport.com

Finally, although your credit reports are chock full of information about your payment history, your credit reports do not contain your credit scores. To get your credit scores, you have to buy those separately.

Two popular questions here at AskTheMoneyCoach.com are: “Why are my credit reports or credit scores different?” and “Why isn’t my credit score contained in my credit report?”

This post will answer those questions.

What is a Credit Report?

A consumer credit report is a detailed file about you that has information on where you live, what debts you owe, how consistently you pay your bills, whether you’ve been sued or arrested, and if you have filed for bankruptcy. Your credit report is important because it may be examined – by anyone from employers to insurance companies – any time you apply for a job, seek credit or insurance, or even try to rent a home or apartment.

Your credit report is maintained by three different nationwide consumer reporting companies: Equifax, Experian and TransUnion. These consumer reporting agencies are commonly called “credit bureaus.”

Credit bureaus are separate companies, independent of each other, and each tracks and records your credit history. Credit bureaus also sell information in your credit files to banks, creditors, insurers, employers and other businesses.

How Credit Report Information Gets Created and Tracked

As mentioned, each of the three nationwide credit bureaus maintain a credit report on you.  So, when you apply for and receive a new credit card, a record is created of the relationship between you and the bank that issued the credit card.

Let’s use a fictious bank called Anybank USA. Suppose that Anybank offers you a Mastercard, you apply for the card, and get approved.

Here is what will happen next:

1. Anybank will tell each of the three credit bureaus that you have a new credit credit card account. (This notification to the bureaus usually happens in about 30 to 60 days after your account is opened).
2. Anybank will tell the bureaus what your spending limit, or credit limit, is.
3. Anybank will tell the bureaus who else is either a co-signer or an authorized to user on your Mastercard.
4. Each month, Anybank will report your spending activity to the credit bureaus, indicating what your current balance is (i.e. how much you’ve spent or charged), and whether or not you’ve stayed within your pre-set credit limit or exceeded it.
5. Each month, Anybank will also report your payment history to the credit bureaus, indicating such details as the amount of your payment and whether or not you’ve paid your bills on time, as per your agreement with Anybank.

Each of the three credit bureaus will update your credit report based on the information they receive from Anybank, and these updates don’t necessarily happen at the same time. Remember: each bureau functions on its own, so the policies, procedures and speed with which information is handled are not identical at all three credit bureaus.

Additionally, each credit bureau may have different information about you — say, for example, your credit card balances may vary in the credit reports of the three bureaus. Again, that’s because the credit bureaus don’t all update their information at the same time/date.

In cases where a credit bureau has completely wrong information about you, you can dispute that information. By law, a credit bureau has 30 days to investigate your dispute. Within that time, they must either verify the information or delete any information that is inaccurate, outdated or unverifiable.

The three credit bureaus keep track of the credit cards you own and their balances, and any loans you took out including mortgages, student loans, auto loans, and more. They monitor your payment history on all of your accounts and will also monitor any judgements, charge-offs, tax liens, bankruptcies, etc.

In a different article I discuss how long these negative items will stay on your credit report. But for the purpose of this article, we will turn our focus now to the difference between a credit report and a credit score.

What is a Credit Score?

A credit score is simply a three-digit number that summarizes your overall credit standing and tells creditors how likely you are to either repay a debt or default on it. A credit score is calculated based on the underlying information that is contained in your credit reports. But a credit score is not automatically included in credit reports. You generally have to pay for a credit score, whereas you’re legally entitled to get your credit reports free of charge every year.

There are a few different consumer credit scores that you as a consumer should mainly be concerned about. They are:

1. The FICO credit score
2. The Experian Plus score
3. The VantageScore

Your FICO Score

Your FICO credit score is issued by the Fair Isaac Corporation. It is a separate entity and business that is not owned by any of the three credit bureaus.

Your FICO score can range between a low score of 300 points to a top score of 850 points.

FICO scores are the most popularly-used credit scores. Anyone that is considering loaning you money, leasing you equipment, or even considering extending you a job offer or renting an apartment to you will probably want to know your credit rating or what your FICO score is.

A low score of, let’s say 550, means that you probably will be denied the credit you want. A high score of perhaps 780 will greatly improve your chances of getting the credit you want. It’s that simple.

Here are details on what factors Fair Isaac uses to determine your FICO credit score.

Fair Isaac, through their myFICO.com website, also offers consumers a wide range of  credit monitoring services which allow you to monitor your credit score for a fee. Personally, I’ve found credit monitoring to be invaluable in helping me to achieve Perfect Credit.

The Experian Plus Score

The Experian Plus is different from your FICO score. The Experian Plus Score, as the name suggests, is issued by the Experian credit bureau. Your Experian Plus score can range between 330 and 830 points.

If you pay all of your bills on time, don’t have any liens or judgements on any of your credit reports and if you have relatively low to zero balances on your credit cards, you will likely have a high Experian Plus score. The reverse is true as well: if you have multiple late payments on your record, a lien, a bankruptcy, etc., chances are your credit score will be low.

The VantageScore

The VantageScore was introduced in 2006 and formed jointly by TransUnion, Equifax and Experian.

Even though the VantageScore was created by a mutual collaboration of the three national credit bureaus, VantageScore is owned by VantageScore Solutions, LLC which acts as a holding company to the intellectual property rights of VantageScore.

Without getting bogged down in all of the legal ownership, rights, etc…here is what you need to know about the VantageScore:

• The VantageScore ranges from 501 to 990 points
• VantageScore uses a familiar letter grade associated with five different ranges within the score.
  • “A” for scores between 900-990
  • “B” for scores between 800-899
  • “C” for scores between 700-799
  • “D” for scores between 600-699
  • “F” for scores 599 and below.

So how do you get everything? If you want your credit reports and credit scores, here is the short answer:

You have to get your credit reports and credit scores separately, and it’s fastest to do it online. Credit reports are available at no charge; credit scores you have to pay for, typically about $10 to $15 or so.

You can get each of your three credit reports from the credit bureaus for free – with no strings attached – by going to AnnualCreditReport.com.

You can get your FICO score from myFICO.com.

You can get your Experian Plus score from Experian.com.

You can get your VantageScore from VantageScore.Experian.com.

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Although lots of people are in the throes of back-to-school shopping, it’s a good idea to think about holiday shopping too.

That’s right: holiday shopping.

Even though we’re tip-toeing into fall, it’s never too soon to start planning – and budgeting for – those inevitable holiday purchases you know you’re going to make.

Unfortunately, far too few Americans engage in that kind of smart money-management.

In fact, a new survey from TransUnion, the big credit reporting agency, finds that one out of three Americans does not save at all for the holiday shopping season.

It’s one thing if those who aren’t saving have taken that approach because they don’t plan on doing any spending. But the reality is that most of those who fail to save are still going to shop. Especially when the holiday music starts filling the air and retailers start going full-throttle with holiday decorations and all of their in-store marketing and merchandising efforts.

So to purchase holiday goodies – everything from clothes to electronics to toys – consumers who haven’t saved will probably just raid their bank accounts and throw their budgets out of whack.

Even worse, many who neglect to save will run up credit card debt as they make merry come November and December.

That’s no way to plan for a brighter new year. A better strategy is to start saving money now to give yourself a few months head start on your holiday shopping season.

“Consumers should plan ahead now by making a list of those they plan to purchase gifts for; determining the total they will need to save between now and the holiday season; and setting a portion aside out of each paycheck,” says Heather Battison, senior director of education for TransUnion’s consumer products.

“That way, when the holidays arrive, consumers can use their saved money, enjoy a more relaxed holiday season – and enter 2012 without the burden of unmanageable credit card debt,” she adds.

I couldn’t agree more.

So whatever funds you can stash away, just do it. You don’t have to save an exorbitant amount. Even if you can only squirrel away $50 a month, that can go a long way toward preventing you from racking up unnecessary holiday debt. (Read the free, online version of my book, Zero Debt, if you already have credit card debt).

Also, if you save money now and pay for your holiday items with cash, that makes it far less likely that you’ll be tempted by those nice ladies behind the counter who ask: “Would you like to save 10% off your purchase?”

What they really mean is: “Will you open up a new credit card account from our store?” If you say “Yes,” you’ll be committing a major financial blunder.

Any time you open a new credit card account, that generates a “hard” inquiry on your credit report, and hard inquiries can lower your credit score. A single inquiry stays on your credit reports from Equifax, Experian and TransUnion for two years. And for the purposes of calculating your FICO credit score, that inquiry counts against you for one year. By various estimates just one inquiry can lower your FICO credit score anywhere from five to 35 points.

So do yourself a favor: start saving money now, planning and budgeting for your holiday purchases. Later, you’ll be glad you did.

In a nutshell, by saving money now for the holiday season, you’ll keep your budget on track, better manage cash flow, prevent yourself from going into debt, and protect your credit rating too. Now that’s being a smart shopper.