B

Bad Credit: A term used to describe a poor credit rating.

Beacon Score: A credit score that is computed from an Equifax credit report, based on scoring models developed by Equifax and Fair, Isaac and Company, Inc.

C

Cardholder: The person who is issued a credit card and/or any authorized users.

Chapter 7 Bankruptcy: A type of consumer bankruptcy where your responsibility for your debts is cleared entirely. You are not required to pay back debts you owe from before your filing. Chapter 7 bankruptcy filing records remain on your credit report for 10 years and the record of each account included in your filing will remain on your report for 7 years.

Chapter 13 Bankruptcy: A type of bankruptcy where the consumer must pay off some of their debts over time. Chapter 13 bankruptcy filing records remain on your credit report for 7 years from the discharge date or 10 years from the filing date if it is not discharged. Each account included in the filing will remain on your report for 7 years.

Charge-off : The balance on a credit obligation that a lender no longer expects to be repaid and writes off as a bad debt.

Collection: Attempted recovery of a past-due credit obligation by a collection department or agency.

Consumer Statement: If a dispute over a credit report item is not resolved to the consumer's satisfaction, a short message can be added to the credit report to express the consumer's disagreement with the reported item.

Credit: The promise to pay in the future in order to buy or borrow in the present.

Credit File: The term credit file is usually used to indicate the full record of a consumer's credit history maintained by a credit bureau. It's another name for credit report.

Creditworthiness: A creditor's measure of a consumer's past and future ability and willingness to repay debts.

Credit bureau: A company that collects and sells information about how people handle credit. The three major national credit bureaus are Equifax, Experian and TransUnion. They are also referred to as consumer reporting agencies and credit reporting agencies.

Credit Grantor: A company or individual who lends money or property and therefore accepts risk.

Credit History: A record of how a person has borrowed and repaid debts.

Credit Limit: The maximum amount of money you can charge on a particular credit account.

Credit Obligation: An agreement by which a person is legally bound to pay back borrowed money or used credit.

Credit Rating: A judgment of someone's ability to repay debts, based on current and projected income and history of payment of past debts

Credit Risk: The measure of a person's creditworthiness.

Credit Report: A document containing financial information about a person, focusing on his or her history of paying obligations, such as mortgages, car payments, utility bills and credit cards. Also includes current balances on outstanding debts, the individual's amount of available credit, public records such as bankruptcies and inquiries about credit from various companies.

Credit Score: A three-digit number that reflects the credit history detailed by a person's credit report.

Credit Scoring Model: The method used to compute your credit score, normally kept secret. Scoring models are often based on historical data from thousands of consumers.

D

Debt: The amount of money owed.

Debt Consolidation: A process of combining debts into one loan or repayment plan. Debt consolidation can be done on your own, with a financial institution or through a counseling service. Student loans are often consolidated in order to secure a lower interest rate.

Debt Settlement: A process where you pay an agency to negotiate directly with your creditors in the hopes of making significantly reduced settlements for your debts. Working with a debt settlement company can result in damaged credit from numerous late payments and collection records. Consumers should fully investigate the practices, reputation and costs of working with a debt settlement company before signing up.

Debtor: Someone who borrows money from another.

Default: A failure to make a loan or debt payment when due. Usually an account is considered to be “in default” after being delinquent for several consecutive 30-day billing cycles. Defaults are a serious negative item on a credit report.

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.

E

Empirica Score: A credit score that is computed from a TransUnion credit report, based on scoring models developed by Equifax and Fair, Isaac and Company, Inc.

Equifax: Equifax is one of the three nationwide credit reporting companies. It is headquartered in Atlanta, Georgia.

Experian: Experian is one of the three nationwide credit reporting companies, created in 1996 when TRW sold-off its credit reporting business. Headquarters in Nottingham, UK and Costa Mesa, California.

F

Fair Isaac: Developer of the FICO score, the worldwide standard for measuring a consumer's creditworthiness and credit risk.

Finance Charges: The amount you are charged to use credit.

FICO Score: The most commonly used credit score.

FTC: The Federal Trade Commission (FTC) is the U.S. Government agency most responsible for regulating the credit reporting agencies.

G

Garnishment: When a creditor receives legal permission to take a portion of your assets like your bank account or salary to repay a delinquent debt

H

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.

Header File: A header file is just the top portion of a credit report (name, addresses, and identification) without information about the consumer's credit history.

High Balance: For an individual creditor on your credit report, High Balance (if reported) indicates the highest amount you ever owed them.

I

Identity Theft: A crime that involves using another's name, Social Security Number or other personal information to acquire credit, make purchases or commit a crime in that name.

Installment Loan: A credit account in which the monthly payment is the same every month and the loan has a set time period. The most common forms of installment credit are mortgages and auto loans.

Interest: The cost of borrowing or lending money, usually a percentage of the amount borrowed or loaned.

Inquiries: A section of the 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.

Investigation: An investigation is the process followed when a consumer submits a dispute to the credit bureau.

J

Joint Account: An account in which two people share full responsibility for repayment.

L

Late Payment: A delinquent payment or failure to deliver a loan or debt payment on or before the time agreed. Late payments harm your credit score for up to 7 years and are usually penalized with late payment charges.

Late Payment Charge: A fee charged by your creditor or lender when your payment is made after the date due.

Lender: The individual or financial institution who will be providing the loan.

Lien: A legal claim against a person's property, such as a car or a house, as security for a debt. Tax liens can remain on your credit report indefinitely if left unpaid or for 15 years from the date paid.

P

Paid as Agreed: A designation on the credit report that indicates the consumer is repaying the credit account according to the terms of the credit agreement

Past Due: When you do not make at least the minimum payment on time, your account is considered past due.

Principle: The amount of money you owe, not including the interest due.

Public Record: Information obtained by the Credit Reporting Agency from court records, such as liens, bankruptcy filings and judgments. Public records are open to any person who requests to see them.

R

Revolving Credit: An account that requires a minimum payment each month plus service charges on the remaining balance. As the balance declines, so does the service charge.

S

Settlement: An agreement reached with a creditor to pay a debt for less than the total amount due. Settlements can be noted on your credit report and are not as beneficial to your credit as paying a debt in full.

Social Security Number: Also referred to as a SSN. This unique nine digit number is used by creditors, lender, banks, insurers, hospitals, employers and numerous other businesses to identify your accounts.

Soft Inquiry: An item on a person's credit report that indicates that someone has asked for a copy of his or her report. Soft inquiries are not included in the formula for determining a person's credit score.

T

Trade Line : An account listed on a credit report. Each separate account is a different trade line.

TransUnion: Trans Union is one of the three nationwide credit reporting agencies. It is headquartered in Chicago, Illinois.

TRW: TRW was one of the original nationwide credit reporting agencies. It exited the field in 1996, and a new company, Experian, took over TRW's credit reporting business.