What is the Difference Between a Credit Rating and Score?

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  • Written By: Felicia Dye
  • Edited By: Heather Bailey
  • Last Modified Date: 17 August 2019
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There is no difference between a credit rating and score. These are simply two terms that can be used interchangeably. It may be found that the term credit score tends to be more popular in some locations than others and vice versa. Both credit rating and score are used to communicate the risk of individuals or businesses defaulting if credit is extended to them.

In the United States (US), how debt is handled is important because most people will need access to some sort of credit in their lifetimes. The availability of their options is generally determined by an assessment of their credit histories. This information is contained in a document known as a credit report.

Credit reports are maintained, and usually sold, by credit reporting agencies. From the information in these documents, the credit reporting agencies have a strategy for developing a risk indicator, which may be known as a credit rating or credit score. In the US, this indicator is generally a number between 300 and 900 and it is more common to hear it referred to as a credit score. In other countries, these figures may be expressed in other ways and it may be more common to refer to them as credit ratings.


The manner in which a credit rating and score is calculated can vary from one credit reporting agency to another based upon the formulas that they use. There are, however, certain factors from a credit report that are commonly applied to the formulas. These include examinations of who has provided an individual with credit, how much credit was provided, and the amount of time the borrower took to pay it back. Credit rating and score is also generally based on whether a debt was repaid according to the outlined terms and the length of an individual’s entire credit history.

The credit score and rating usually are not provided with a credit report. These numbers generally must be purchased, even if an individual wants to know her own credit rating. When businesses purchase a credit score, they may use it to determine several things.

First, it will likely be used to determine if a person will receive credit. Second, it may be used to determine what the finance charges or interests rates will be. Third, it may be used to establish the terms under which credit is extended. For example, those with a low credit score and rating may be required to have collateral while those with high credit scores and ratings may not be subjected to this requirement.


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