Lesson P102.1 · Personal Finance 102: Credit, Debt and Setbacks
Credit reports and scores
4-minute read · Figures checked October 2026
Photo: Lukas Blazek / Pexels, Pexels License
The short answer
A credit report is the record of how you've handled borrowed money: your accounts, balances, late payments and collections. A credit score is a number figured from that report to predict whether you'll pay on time. Base FICO scores run from 300 to 850. You can see all three of your reports free, every week, at AnnualCreditReport.com.
Your report is the record. Your score is the grade.
Three big credit bureaus keep the reports: Equifax, Experian and TransUnion. Each one collects what lenders, card companies and collectors send in. Not every lender reports to all three, so your three reports can look different.
A report lists who you've borrowed from, what you owe, whether you paid on time, and any collections or bankruptcies. It also shows who has pulled your report lately.
A score is a number a computer figures from one report. You have more than one. Lenders use different scoring formulas, so the score in your bank app may not match the one a landlord or lender sees. Every score starts from the report, so the report is the thing to get right.
What goes into a FICO score
FICO publishes how its scores weigh your report:
| What FICO looks at | Share | In plain words |
|---|---|---|
| Payment history | 35% | Did you pay on time? |
| Amounts owed | 30% | How much do you owe, and how much of your available credit are you using? |
| Length of credit history | 15% | How long have your accounts been open? |
| New credit | 10% | Have you opened several accounts in a short time? |
| Credit mix | 10% | What kinds of accounts do you have? |
Almost two-thirds of the score (65%) comes from the first two lines: paying on time and keeping balances low. You control both of those month to month.
Some things don't count at all. FICO scores don't use your income, your job or your employer, though a lender may ask about those separately. Checking your own credit doesn't count against you either.
Who checks, and why it matters in this work
Lenders check credit before a loan or a card. Many landlords, utilities and insurers check it too. A thin or damaged report can mean a bigger deposit on an apartment or a power account, or a request for a co-signer. Some employers look at credit history as part of a background check. They need your written permission first.
In crew life, this shows up at awkward times: a move in March before the season starts, putting the power in your own name, or a background check for a better job.
Example: Marcus, 24, wants his own place before crack season. He pulls all three reports first. Two show his phone account paid on time. The third also lists a store card he never opened. That's an error to dispute (P102.2) and a possible sign someone used his name. IdentityTheft.gov has the steps.
Different approaches
Where respected teachers differ
Building a credit score or living without one. Dave Ramsey teaches you don't need a credit score; a debt-free life ends with no score, and a mortgage lender can verify you by hand using 12–24 months of on-time bills. Many landlords, utilities and insurers check credit, so others suggest building a score without paying interest. Either way, never borrow just to raise a score.
Your Move
Do this week
- Go to AnnualCreditReport.com. Type the address yourself instead of clicking a link, or call 1-877-322-8228.
- Request all three reports: Equifax, Experian and TransUnion. You'll answer a few questions to prove it's you.
- Read each one. Check your name and addresses, every account, every balance, any late payments or collections, and who has pulled your report.
- Circle anything that looks wrong. Save the reports somewhere private; you'll use them in P102.2.
Log it: Pulled all three credit reports.
Common questions
Does checking my own credit lower my score?
No. FICO doesn't count it when you check your own credit.
Do I get a score at AnnualCreditReport.com?
You get your reports there, not a score. Many banks and card apps show a free score, but it may use a different formula than the one a lender uses.
How often can I get my reports free?
Every week, from each of the three bureaus. The weekly program is now permanent.
Watch out for
- Lookalike sites. Only AnnualCreditReport.com is authorized to fill orders for the free reports, and some fakes use misspelled addresses.
- Emails or texts asking for your Social Security number "to see your report." AnnualCreditReport.com and the bureaus won't email you asking for it.
Free help
- AnnualCreditReport.com, or call 1-877-322-8228, for free weekly reports from all three bureaus
- Federal Trade Commission (FTC): Free credit reports
- FTC: IdentityTheft.gov, if you find accounts that aren't yours
- Consumer Financial Protection Bureau (CFPB): Submit a complaint about a credit report problem
Free practice
Lesson check
5 questions on this lesson, one at a time, with the answer and the reason after each. Pass with 4 right, including every must-know question.
This is general education, not tax, legal, investment or insurance advice. Rules change and every situation is different. Check the sources below, and talk to a qualified professional before you act on it.
Sources
- Federal Trade Commission: Free Credit Reports
- Consumer Financial Protection Bureau: What is a credit report?
- myFICO: What's in my FICO Scores?
- myFICO: What's not in my FICO Scores
- Federal Trade Commission: Employer Background Checks and Your Rights
- Ramsey Solutions: Can You Buy a House With No Credit?
- Federal Trade Commission: IdentityTheft.gov
- Consumer Financial Protection Bureau: Submit a complaint
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