Understanding your credit history is very important but many consumers probably do not realize that it is actually more important to focus on your credit report over your credit score.

While many financial agencies and credit card providers will regard your credit score as a determining factor in your creditworthiness, as a consumer you should be much more concerned with your actual credit report.

It is not enough to know where your credit stands at any particular time; it is, in fact, more important to know why it stands where it stands. Thus, here are a few specific reasons to focus more on your credit report than your credit score:

  • Disputing Your Score. Your credit score is determined by the information that you will find in your credit score. This means that you cannot dispute your credit score. However, you can protest the information on your credit report. Your credit report is full of information that may or may not be accurate and this means that your credit score may not be accurate. This is what the “free annual credit report” business is all about: making sure that consumers know why their score is what it is. Accordingly, you should check your credit report at least once a year to ensure that the information is accurate.

If you feel that there is an error, though, you will need to dispute it. To do this you must file a report of 100 words or less with the credit bureau, attaching your statement to your file.

Each of the three credit bureaus are different in the way they hear disputes and how they determine the accuracy of information so be sure to investigate that as well.

  • Your Score Represents Your History. As mentioned before, your credit score only reflects what is already in your credit report, which is, basically, a collection of your credit history. Every time you apply for credit, the lender will look through your credit report to see what kind of track record you have and determine whether or not you are approved. Again, make sure the information is correct and accurate.
  • Each Agency Is Different. There are three major credit bureaus, and each one uses its own formula for determining a credit score. FICO, a credit reporting agency, uses an in-house formula while its main competitor utilizes the VantageScore. Furthermore, each major lender, all the credit card companies, and even the mortgage companies all determine their own values. This is why financial experts always recommend shopping around when you want some credit.
  • Potential Employers Check Your Report. According to Rod Griffin, director of education for credit bureau Experian, “Employer’s never receive a credit score; they get an edited version of a person’s credit report. There’s nothing that would violate the Equal Employment Opportunity Act, so there’s no information about birthdate or spousal information, for instance.” Employers, of course, claim that the only reason they’ll check your report is to confirm your identity but they can use this information to confirm your responsibility level too. Of course, this is supposed to be illegal.
  • Insurers Check Your Report. While they may not be able to look at your whole credit report, they can see part of it; enough to determine how responsible you have been in the past. Michael Barry, a vice president with the Insurance Information Institute says: “They’re looking for someone whose credit card history has shown them to be a responsible… The insurance industry has found this a very predictive model when they are assessing the likelihood of whether someone will file a claim.”
  • Identity Theft. Finally, when you stay on top of your credit report, you are better prepared to monitor for identity theft.