Credit glossary

Credit report

A record of your credit accounts, payment history, inquiries and some public information, kept by a credit bureau.

Credit bureau

A consumer reporting agency that collects and sells credit information. The three nationwide bureaus are Equifax, Experian and TransUnion.

Specialty consumer reporting agency

An agency that keeps reports on specific areas, such as bank account history, rental history or insurance claims.

FICO Score

A credit score from 300 to 850 created by FICO, based on payment history, amounts owed, length of history, new credit and credit mix.

VantageScore

A credit scoring model created by the three nationwide bureaus. Many free apps show it.

Credit utilization

The share of your available card credit you are using, based on reported balances. Lower is generally better.

Hard inquiry

A credit check made when you apply for credit. It may lower scores slightly and can remain on a report for up to two years.

Soft inquiry

A check that does not affect scores, such as viewing your own report or a review by an existing creditor.

Late payment

A payment reported as past due, usually once it is 30 or more days late.

Date of first delinquency

The date an account first became delinquent and was not brought current. Reporting time limits for most negative items are measured from it.

Charge-off

When a creditor writes off a seriously delinquent debt as a loss. The debt is still owed and may be sold to a collector.

Collection account

A debt that has been placed with or sold to a collection agency.

Debt validation

Your right under the FDCPA to dispute a debt in writing within 30 days of a collector’s initial notice and receive verification before collection continues.

Dispute

A request asking a credit bureau or furnisher to investigate information you believe is inaccurate or incomplete.

Furnisher

A company, such as a bank, lender or collector, that reports information about you to credit bureaus.

Adverse action notice

A notice a lender must send when it denies credit or offers worse terms, explaining the reasons and, if a report was used, which bureau.

Credit freeze

A free block that stops most new lenders from accessing your credit report until you lift it.

Fraud alert

A note on your file asking lenders to verify your identity before opening credit. An initial alert lasts one year.

Secured credit card

A card backed by a cash deposit that usually equals the credit limit. A common first card.

Authorized user

A person added to someone else’s card account. The account may appear on the authorized user’s report if the issuer reports it.

Credit-builder loan

A small loan held in an account while you make payments, designed to create a payment history.

ITIN

Individual Taxpayer Identification Number, issued by the IRS to people who need to file taxes but are not eligible for an SSN.

CPN

A so-called “credit privacy number” sold as a substitute for an SSN. Using one on credit applications can be illegal.

Goodwill letter

A request asking a creditor to reconsider reporting an accurate late payment because of special circumstances. Creditors are not required to agree.

Rapid rescore

A lender-requested update that reflects corrected or new information on a mortgage applicant’s report more quickly.

Middle score

For mortgages, lenders often pull a score from each of the three bureaus and use the middle one.

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