Credit Reports

Credit Report Glossary

Accounts in Good Standing: Accounts and credit items listed on your credit report that have a positive status and reflect favorably on your creditworthiness.

Consumer Disclosure: When your credit report is given directly to you, it is called a consumer disclosure because it discloses the contents of your credit file to you, the consumer. When you ask to see your credit report, it is recorded as a soft inquiry. Soft credit report inquiries are recorded on your credit report, but they don't affect your credit score.

Consumer Credit Counseling Service: An organization, usually a nonprofit, designed to help you repay debts through careful budgeting and money management. In addition to helping consumers manage money, consumer credit counseling services have the power to request that creditors accept a specific repayment plan, such as a longer pay-off period.

Consumer Reporting Agency (CRA) (Also called a credit bureau): A company that gathers and records personal credit histories and provides credit report information upon request. CRAs are subject to the Fair Credit Reporting Act (FCRA) and they make sure that only companies with a legitimate business purpose can view your credit report. There are three major credit bureaus: Equifax, Experian (formerly TRW), and TransUnion.

Credit: Credit is your right to defer payment or debt. Essentially, it's a promise to pay in the future in order to borrow in the present.

Credit Bureau: A company or organization of local merchants that provides credit reports. In the past, most towns had their own credit bureaus. Today, however, most credit bureaus have been acquired by Experian, Equifax and TransUnion, and those credit bureaus that remain independent are associated with one of these 3 major credit bureaus.

Credit Grantor: A company or individual who lends money or property and therefore accepts risk. Credit grantors use credit reports to decide whether to grant a loan or property to a given consumer.

Credit History: A record of your history of borrowing and repaying debts.

Credit Items: Items on your credit report reported by current or past creditors.

Credit Limit: The maximum amount a borrower can draw upon for credit or the maximum amount an account can show as outstanding.

Credit Report: A complete and confidential summary of your credit history including your existing debts and how well you've repaid past debts, which indicates your creditworthiness. A credit report also lists the companies that have inquired about your credit history recently, and any bankruptcies, foreclosures, and judgments you've encountered. Your credit report will also probably include current and prior addresses, current and prior employment, and other personal information such as your social security number, date of birth, and driver's license number.

Credit Score: Your credit worthiness expressed in a computer-generated number. Based on the information in your credit report, your credit score is the result of addition and subtraction of points based on factors such as how often you've been late with payments, the types of credit accounts you have, how close you are to your credit limits, and how many times you've recently applied for credit. Credit scoring increases the speed and efficiency with which consumers are granted credit. Credit scores range from 300 to 900, with the majority of people in the 600 to 800 range.

Credit Scoring System: A statistical system that determines your total credit score by assigning numerical scores to various credit-related characteristics.

Creditworthiness: A creditor's measure of your ability to pay back future debts. A consumer who receives favorable consideration and approval for credit from an establishment to which he or she applied is considered creditworthy.

Creditor: A person or business that loans money to someone else. The opposite of a debtor.

Debtor: Someone who borrows money from another. The opposite of a creditor.

Delinquent: Accounts that are past due for payments are called delinquent accounts. Common classifications of delinquent accounts are 30, 60, 90, and 120 days past due.

Dispute: When a consumer believes something on his or her credit report is incomplete or inaccurate, he or she may perform a credit report dispute. Credit report agencies are required under the Fair Credit Reporting Act (FCRA) to investigate and correct or remove any inaccurate information that cannot be verified.

Equifax: One of the three major credit bureaus, Equifax is headquartered in Atlanta, Georgia. The other two national credit reporting agencies are Experian and TransUnion.

Experian: One of the 3 major credit bureaus, Experian was created in 1996. Experian has headquarters in Costa Mesa, California, and Nottingham, UK. The other two national credit bureau agencies are TransUnion and Equifax.

Fair Credit Reporting Act (FCRA): A law that establishes consumer rights in regards to credit reports. The FCRA governs credit report agencies and does the following to protect consumers: limits the purposes for which credit can be checked, ensures consumers have the right to view their credit files, and provides consumers with the right to correct errors in their credit reports.

Federal Trade Commission (FTC): The U.S. Government agency responsible for regulating the credit report agencies. The FTC actively educates consumers on how to improve credit scores and how to avoid identity theft. The FTC maintains a database of identity theft complaints.

FICO: A credit score computed from an Experian credit report.

Hard Inquiry: An inquiry about your credit history made by a creditor or lender with whom you have applied for a loan or line of credit. Creditors and lenders see hard credit report inquiries that are up to two years old when they look at your credit report. Hard inquiries are also used in the calculation of your credit score; too many hard credit report inquiries can reflect negatively on your creditworthiness.

Inquiries: A section of your credit report stating who has looked at your credit report in the last two years. There are two types of inquiries - hard inquiries and soft inquiries. Hard credit report inquiries are the inquiries about your credit history made by potential lenders and creditors. Soft inquiries are inquiries about your credit history made by you or by your employer.

Identity Theft: A crime in which an imposter steals the name, social security number, and other personal identification information from another person for the purpose of opening credit accounts, using existing credit accounts, or using the victim's identity for other benefits. Identity theft often occurs without the victim's knowledge, especially when the identity thief changes the phone number and address on the victim's accounts before the consumer can be alerted. Identity theft is a serious crime because it can ruin a victim's credit. The best way to prevent identity theft or to stop an identity thief in his or her tracks is to view your credit report regularly. If you become the victim of identity theft, the best thing you can do to prevent further occurrences is to place a security alert on your credit report.

Identity Theft Detection: For fast and accurate identity theft detection, your best bet is a 3 bureau credit report. On your 3 bureau credit report, look for the following for identity theft detection: accounts you don't recognize, credit report inquiries by companies you aren't familiar with, incorrect address or employment information, and activity on accounts you thought were inactive.

Lien: When a lien is placed on a consumer's property, it means the property is being used as collateral during the repayment of owed money. A consumer cannot sell a property with a lien on it until they've paid off the creditor with whom they have the lien.

Line of Credit: The maximum amount a borrower can draw upon or the maximum an account can show as outstanding.

Personal Information: Information on your credit report unrelated to your credit, such as your social security number, driver's license number, your birth date, spouse's name, telephone number, and address.

Public Record: Public records listed as part of your credit report include bankruptcies, foreclosures, and court judgments. The only companies and individuals that can have information added to your credit report are companies that have a relationship with a credit bureau or collection agency.

Request for Your Credit History: Whenever a lender or credit grantor makes a request for your credit history, that request is recorded on your credit report in the form of an inquiry. The requests for your credit history that are visible on your credit report depend on who's looking at the report. Credit grantors only see credit inquiries generated by other grantors as a result of a credit application, but when you look at your own credit report, you see all requests for your credit history, including prescreened and direct marketing offers, as well as inquiries from potential employers.

Soft Inquiry: When you or your employer requests a copy of your credit report, it gets recorded as a soft inquiry. Soft inquiries do not affect your credit score, and they are not revealed to potential lenders or creditors.

Security Alert: If you have been the victim of identity theft or fraud, you can request that a message be placed on your credit report. This message, known as a "security alert," indicates that you are possibly a victim and that you should be contacted personally before credit is granted.

Single Bureau Credit Report: A credit report from one of the three nationwide credit report agencies.

Subscriber: Customers of a credit report agency who regularly credit checks and credit reports. These include mortgage companies, banks, credit card companies, auto dealers, collection agencies, and apartment managers.

TransUnion: One of the three major credit bureaus, TransUnion is headquartered in Chicago. TransUnion is a privately held corporation.

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