Credit glossary
135 terms you'll run into on credit reports, score disclosures, collection letters and loan paperwork. Each one has a short definition here and a fuller page with an explanation, sources and the guides that go deeper.
Matches words in the term and its short definition.
A
- Account status codeA coded field in each account update telling the bureaus whether the account is current, a set number of days behind, or closed in a final state.
- Adverse action noticeThe letter a lender, landlord, insurer or employer must send when your credit report helped lead to a denial or worse terms.
- Adverse informationNegative information on a credit report, such as late payments, collections, charge-offs, foreclosures or bankruptcies.
- All zero except one (AZEO)A forum-born utilization tactic: pay every card to $0 before its statement closes except one, which reports a small balance.
- Amounts owedFICO's name for the debt category of your score, about 30% of it for the general population, led by how much of your card limits you use.
- Annual percentage rate (APR)The yearly interest rate on a credit card or loan, and the number to compare when deciding which balance costs you the most.
- AnnualCreditReport.comThe official site for free credit reports from Equifax, Experian and TransUnion, now available every week at no charge.
- Authorized userSomeone a cardholder adds to a credit card account who can use the card but isn't legally responsible for paying the debt.
- Average age of accountsThe combined age of your credit accounts divided by how many you have, one way scores judge how established your history is.
B
- Balance transferMoving debt from one credit card to another, usually to a card offering a low promotional rate, in exchange for a fee.
- Buy now, pay later (BNPL)Short-term installment financing offered at checkout, often split into four payments, whose credit reporting depends on the lender and product.
C
- CARD ActThe Credit Card Accountability Responsibility and Disclosure Act of 2009, which limited card rate hikes and penalty fees and added statement disclosures.
- Chapter 7 bankruptcyA liquidation bankruptcy that wipes out many debts within months and can stay on your credit report for up to 10 years from filing.
- Chapter 13 bankruptcyA repayment-plan bankruptcy in which you pay creditors over several years under court supervision before eligible remaining debts are discharged.
- Charge-offA lender's accounting decision to write an unpaid debt off as a loss, usually after months of missed payments, while you still owe it.
- ChexSystemsA specialty consumer reporting company that many banks and credit unions check before opening a checking or savings account.
- Closed accountAn account that can no longer take new charges, closed by you or the lender, which can remain on your credit report for years.
- Collection accountAn entry showing a debt being collected by an agency, a debt buyer or the creditor's own collection unit after the original account went unpaid.
- Compliance condition codeA Metro 2 field that furnishers use to flag legally required conditions on an account, most visibly that you dispute it.
- Consumer Financial Protection Bureau (CFPB)The federal agency that writes and enforces many consumer finance rules, including credit reporting and debt collection rules, and takes complaints.
- Consumer reporting agencyThe FCRA's term for any company that regularly gathers information on consumers to sell reports about them to others.
- Consumer statementA brief note you can add to your credit file explaining your side of a dispute that the bureau's investigation didn't resolve.
- CosignerA person who signs a loan alongside the borrower and agrees to repay it in full if the borrower doesn't.
- Credit ageInformal shorthand for how long you've had credit, usually meaning the age of your oldest account or the average age of all of them.
- Credit builder loanA small loan whose money is held in a locked account while you make monthly payments, with the funds released to you as you repay.
- Credit bureauA company that collects account information from lenders and others and sells credit reports; Equifax, Experian and TransUnion are the nationwide three.
- Credit counselingGuidance from a counselor, usually at a nonprofit agency, on budgeting, debt and credit, sometimes leading to a debt management plan.
- Credit fileThe full record a credit bureau keeps about you, from which it produces the credit reports that lenders and you see.
- Credit freeze (security freeze)A free block that stops a credit bureau from releasing your report to new creditors until you lift it.
- Credit inquiryA record that someone pulled your credit report, logged as either a hard inquiry or a soft inquiry depending on the reason.
- Credit limitThe maximum balance a lender lets you carry on a credit card or credit line, and the denominator in your utilization ratio.
- Credit lockA bureau product that blocks access to your credit report much like a freeze, but under the product's terms rather than the freeze statute.
- Credit mixThe variety of account types in your file, such as cards, auto loans and mortgages, worth about 10% of a FICO Score.
- Credit monitoringA service that watches one or more of your credit files and alerts you to changes such as new accounts, inquiries or balance swings.
- Credit repair organizationA company that charges to improve your credit record, regulated by the federal Credit Repair Organizations Act.
- Credit Repair Organizations Act (CROA)The federal law at 15 U.S.C. 1679 that regulates companies selling credit repair and protects the consumers who hire them.
- Credit reportA bureau's record of your credit accounts, payment history, inquiries and collections, used by lenders and others to judge risk.
- Credit report disputeA formal challenge to information in your credit file that you believe is inaccurate, incomplete or unverifiable, sent to a bureau or the furnisher.
- Credit scoreA three-digit number calculated from one bureau's credit report that estimates how likely you are to repay credit as agreed.
- Credit utilizationThe share of your credit card limits that your reported balances use, measured on each card and across all cards together.
D
- Date of first delinquency (DOFD)The month you first fell behind on an account and never caught up before it was charged off or sent to collections.
- Date of last activityThe most recent date something happened on an account, like a payment or purchase, which people often confuse with the delinquency date.
- Debt management plan (DMP)An arrangement through a credit counseling agency in which you make one monthly payment that it distributes to your creditors.
- Debt settlementNegotiating with creditors to accept less than the full balance, either on your own or through a settlement company that charges a fee.
- Debt validationYour right under the FDCPA and Regulation F to get details about a debt from a collector and make it verify the debt before collecting.
- Debt-to-income ratio (DTI)Your monthly debt payments divided by your gross monthly income, a measure lenders weigh alongside your credit score.
- Deed in lieu of foreclosureAn agreement in which you hand your home's title to the mortgage lender to settle the loan instead of going through foreclosure.
- DelinquencyBeing behind on a required payment, which lenders report in 30-day steps once an account is at least 30 days past due.
- Derogatory markAny seriously negative item on a credit report, such as a 90-day late, charge-off, collection, repossession, foreclosure or bankruptcy.
- Desktop Underwriter (DU)Fannie Mae's automated underwriting system, which lenders use to evaluate conventional mortgage applications against Fannie Mae's rules.
E
- e-OSCARThe electronic system the credit bureaus use to send consumer disputes to lenders and collectors and to receive their answers.
- ECOA codeThe field on each account that shows your relationship to it: individual, joint, authorized user, cosigner or another role.
- EquifaxOne of the three nationwide credit bureaus, keeping its own credit file on you, separate from Experian's and TransUnion's.
- ExperianOne of the three nationwide credit bureaus, keeping a separate credit file on you and selling consumer products such as Experian Boost.
- Experian BoostA free Experian feature that adds on-time utility, phone, streaming, insurance and some rent payments from your bank account to your Experian file.
F
- Fair Credit Reporting Act (FCRA)The federal law at 15 U.S.C. 1681 and following that governs credit reports, who can see them, and how errors get fixed.
- Fair Debt Collection Practices Act (FDCPA)The federal law at 15 U.S.C. 1692 that limits how third-party debt collectors can contact you and what they can say.
- FHA loanA mortgage insured by the Federal Housing Administration that allows lower credit scores and smaller down payments than many conventional loans.
- FICO ScoreThe family of credit scores built by Fair Isaac Corporation, known as FICO, and used in most U.S. lending decisions.
- FICO Score 8The FICO version most widely used for credit cards and general lending, and the one many free score offers display.
- FICO Score 10TA FICO version that adds trended data, reading 24 months or more of balance and payment history instead of a single monthly snapshot.
- ForbearanceA temporary pause or reduction in loan payments that a lender agrees to during a hardship, with the skipped amount repaid later.
- ForeclosureThe legal process a mortgage lender uses to take and sell a home after the borrower stops paying, reported on the mortgage account.
- Fraud alertA free flag on your credit file telling lenders to verify your identity before opening new credit in your name.
- FurnisherAny company that sends information about your accounts to the credit bureaus, such as a card issuer, lender, loan servicer or collector.
G
H
I
- Identity theft reportAn official report of identity theft, usually filed with the FTC at IdentityTheft.gov, that bureaus, lenders and collectors act on.
- Inactive accountA credit account you haven't used for a long stretch, which the issuer may close without giving you advance notice.
- InnovisA credit reporting company separate from the big three, listed by the CFPB among supplementary credit reporting companies.
- Installment accountA loan repaid in a fixed number of scheduled payments, such as an auto, student, personal or mortgage loan.
J
L
- Late paymentA payment made after its due date, which lenders generally report to the bureaus only once it is at least 30 days past due.
- Length of credit historyThe FICO category, about 15% of a score for the general population, that measures how long your accounts have been open.
- LexisNexis Risk SolutionsA data company whose consumer reports, including C.L.U.E. insurance claims histories, are used by insurers and other businesses.
- Loan modificationA permanent change to a loan's terms, such as the rate, length or balance, agreed with the lender to make payments affordable.
- Loan-level price adjustment (LLPA)A risk-based charge Fannie Mae and Freddie Mac apply to conventional mortgages by credit score and loan-to-value, which shapes the price lenders quote.
M
- Method of verificationThe description of how a bureau confirmed a disputed item, which you can request after a reinvestigation under 15 U.S.C. 1681i.
- Metro 2The standard electronic format lenders and collectors use to send account data to the credit bureaus, usually in monthly batches.
- Middle scoreThe score a mortgage lender typically uses after pulling one score from each of the three bureaus: the one in the middle.
- Minimum paymentThe smallest amount you must pay by the due date to keep a credit card or loan account in good standing for that month.
- Mixed fileA credit file that contains another person's accounts, addresses or name variations, usually because your identifying details look alike.
- Mortgage overlayA lender's own requirement layered on top of a loan program's rules, such as a higher minimum credit score than FHA or Fannie Mae requires.
N
O
- Open accountAn account type that must be paid in full every month, such as a charge card; the phrase also means any account not yet closed.
- Original creditorThe company you first borrowed from or owed, such as a card issuer or hospital, before a debt was sold or sent to a collector.
- OverlayA stricter rule a lender adds on top of a loan program's official requirements, most often a higher minimum credit score.
P
- Paid in fullAn account status showing a debt was repaid in its entirety, as opposed to settled for less than the full balance.
- Past-due amountThe part of an account's balance that was due but hasn't been paid, reported separately from the total balance.
- Pay for deleteAn offer to pay a collection in exchange for the collector removing it from your credit reports, which many collectors refuse.
- Payment historyThe record of whether you've paid your accounts on time, the largest FICO category at about 35% of a score for the general population.
- Payment ratingA Metro 2 code sent along with the account status that records how far behind an account was for the reporting period.
- Permissible purposeA legal reason, listed in 15 U.S.C. 1681b, that a company must have before it can obtain your credit report.
- Personal loanAn installment loan, usually unsecured, repaid in fixed monthly payments over a set term and often used to consolidate card debt.
- Prescreened offerA credit or insurance offer sent because a bureau put you on a list matching criteria a lender chose, logged as a soft inquiry.
- Public recordInformation drawn from government records on a credit report; today mainly bankruptcies, since the bureaus dropped civil judgments and tax liens.
R
- Rapid rescoreA lender-ordered update that gets corrected or paid-down account data onto your credit reports in days instead of weeks.
- Rate shoppingComparing loan offers from several lenders in a short window, which FICO Scores count as one inquiry for mortgage, auto and student loans.
- Re-agingReporting a later delinquency date than the real one, which keeps a negative account on a credit report past its legal limit.
- Reason codeA short statement that comes with a credit score naming a factor that held it back, listed in order of impact.
- Regulation FThe CFPB rule at 12 CFR 1006 that carries out the FDCPA, setting detailed limits on debt collector calls, messages, notices and credit reporting.
- ReinvestigationThe FCRA's word for a credit bureau's investigation of information you dispute in your credit file.
- Rent reportingSending your rent payment history to one or more credit bureaus, through a landlord or a paid service, so it appears on your report.
- Reported balanceThe account balance a lender sent to the credit bureaus in its latest update, which may differ from what you owe today.
- RepossessionA lender taking back a car or other collateral after missed payments, reported as a status on the loan rather than as a separate record.
- Revolving accountA credit line you can borrow against, repay and borrow again up to a limit, such as a credit card or personal line of credit.
S
- ScorecardA scoring formula built for one group of similar credit files; also part of the name of FHA's automated TOTAL Mortgage Scorecard.
- Secured credit cardA credit card backed by a refundable cash deposit, which usually sets the limit, used mostly to build or rebuild credit.
- Settled accountA debt the creditor or collector agreed to close for less than the full balance, reported as settled rather than paid in full.
- Short saleSelling a home for less than the mortgage balance with the lender's approval, with the lender accepting the proceeds instead of a full payoff.
- Soft inquiryA credit check that doesn't affect your scores, such as checking your own credit, a prescreened offer or an existing lender's account review.
- Special comment codeA Metro 2 field furnishers use to attach standardized remarks to an account, such as a note about a payment arrangement.
- Statement balanceThe total a credit card statement shows as owed at the close of a billing cycle, usually the balance reported to the bureaus.
- Statement closing dateThe last day of a card's billing cycle, when the issuer totals your balance for the statement and usually reports it to the bureaus.
- Statute of limitationsThe state-law deadline for suing you over a debt, which varies by state and debt type and runs separately from credit reporting limits.
- Student loan defaultThe status a federal Direct Loan reaches after 270 days of missed payments, which brings collection actions and serious credit damage.
T
- Thin fileA credit file with too few accounts or too little history to produce a reliable score, or sometimes any score at all.
- Time-barred debtA debt old enough that the state deadline for suing over it has passed, even though the debt itself may still be owed.
- TradelineIndustry shorthand for a single account entry on your credit report, with its balance, limit, status, dates and payment history.
- TransUnionOne of the three nationwide credit bureaus, keeping its own credit file on you separate from Equifax's and Experian's.
- Trended dataYour month-by-month history of balances, limits and payment amounts, used by newer scores in place of a single monthly snapshot.
- Tri-merge reportA mortgage credit report that combines your Equifax, Experian and TransUnion files and scores into one document for the lender.
U
- UltraFICOA FICO score that blends your traditional FICO Score with bank-account data you choose to share, offered only through participating lenders.
- UnderwritingThe lender's review of your credit, income, assets and debts to decide whether to approve a loan and on what terms.
- Unsecured credit cardA standard credit card with no deposit behind it, where the limit rests on the issuer's review of your credit and income.
- Utilization thresholdA supposed cutoff, like 30%, where utilization starts hurting a score; scoring companies publish no official thresholds.
V
Z
Numbers
- 605B identity theft blockYour right under FCRA section 605B (15 U.S.C. 1681c-2) to have a credit bureau block information that resulted from identity theft.
- 609 letterA template dispute letter citing FCRA section 609, sold as a way to force deletions, which the law doesn't actually support.
- 611 disputeA dispute filed with a credit bureau under FCRA section 611 (15 U.S.C. 1681i), the standard route for fixing errors on your report.
- 623 disputeA dispute sent directly to the lender or collector that reported an item, under FCRA section 623 (15 U.S.C. 1681s-2) and Regulation V.