Glossary
Credit & Financial Terms
Plain-language definitions of the words you'll see in your credit reports, dispute letters, and bureau responses. Educational only — not legal or financial advice.
Innovative Creative Solutions provides educational tools and self-help document drafting support only. We do not repair credit, remove accurate information, contact credit bureaus, creditors, collectors, or lenders on your behalf, negotiate debts, guarantee score increases, guarantee item removals, or guarantee loan approval. Users are responsible for reviewing, editing, and submitting any documents themselves.
AA
- Account in Good Standing
- An account that is current on payments and has no negative marks reported. Lenders view these accounts as low risk.
- Annual Fee
- A yearly charge some creditors apply to keep a credit account open, common with certain credit cards.
- APR (Annual Percentage Rate)
- The yearly cost of borrowing money, expressed as a percentage. It includes interest and sometimes fees.
- Authorized User
- A person added to another person's credit account. They can use the card but are not legally responsible for repayment. The account may appear on the authorized user's credit report.
BB
- Balance
- The amount currently owed on a credit account at a given point in time.
- Bankruptcy
- A legal process that can reduce or eliminate debts. It appears on a credit report and significantly affects credit for several years.
- Bureau
- A credit reporting agency that collects and maintains consumer credit information. The three major U.S. bureaus are Equifax, Experian, and TransUnion.
CC
- Charge-Off
- When a creditor writes off an account as a loss because payments are severely overdue. The debt may still be owed and the account is typically reported as a negative item.
- Collection
- When an overdue account is turned over to a collection agency or internal collection department to recover the unpaid balance.
- Consumer Reporting Agency
- A company that compiles and sells credit information about consumers. Credit bureaus are the most common type.
- Credit Limit
- The maximum amount a creditor allows you to borrow on a revolving account, such as a credit card.
- Credit Report
- A detailed record of your credit history, including accounts, payment history, inquiries, and public records.
- Credit Score
- A number that summarizes the information in your credit report, used by lenders to estimate credit risk.
- Credit Utilization
- The share of your available credit that you are currently using. Lower utilization generally helps your credit score.
- Creditor
- A company or person you owe money to, such as a bank, card issuer, or lender.
DD
- Derogatory Mark
- A negative item on a credit report, such as a late payment, collection, charge-off, or bankruptcy.
- Dispute
- A formal request to a credit bureau or furnisher to investigate information you believe is inaccurate, incomplete, or unverifiable.
- DTI (Debt-to-Income Ratio)
- A measure comparing your monthly debt payments to your monthly income. Lenders use it to judge affordability.
EE
- Equifax
- One of the three major U.S. credit reporting bureaus.
- Experian
- One of the three major U.S. credit reporting bureaus.
FF
- FICO Score
- A widely used credit scoring model developed by the Fair Isaac Corporation. Many lenders rely on FICO scores.
- Furnisher
- A company that supplies information to credit bureaus, such as a bank, card issuer, or collection agency.
- FCRA (Fair Credit Reporting Act)
- A U.S. law that regulates how credit information is collected, used, and disputed. It gives consumers the right to dispute inaccurate information.
- FDCPA (Fair Debt Collection Practices Act)
- A U.S. law limiting how debt collectors may contact and interact with consumers.
HH
- Hard Inquiry
- A credit check that occurs when you apply for credit. It may slightly lower your score and appears on your report.
II
- Inquiry
- A record of who accessed your credit report, typically when you apply for credit.
- Installment Loan
- A loan with fixed, equal payments over a set period, such as an auto loan or mortgage.
JJ
- Judgment
- A court order requiring payment of a debt. It may appear as a public record on a credit report.
LL
- Late Payment
- A payment made after its due date. Payments 30 or more days late are typically reported to bureaus.
- Letter of Dispute
- A written document you send to a bureau or furnisher requesting investigation of information you believe is inaccurate.
PP
- Public Record
- Legal information available to the public that may appear on a credit report, such as bankruptcies, judgments, or tax liens.
RR
- Revolving Account
- A credit account with a reusable limit, such as a credit card, where the balance can go up and down.
SS
- Soft Inquiry
- A credit check that does not affect your credit score, such as when you review your own report or receive a prequalification offer.
TT
- Tradeline
- An individual account listed on a credit report, including its balance, status, and payment history.
- TransUnion
- One of the three major U.S. credit reporting bureaus.
VV
- VantageScore
- A credit scoring model created jointly by the three major bureaus as an alternative to FICO.
Term not listed here?
Suggest a term or ask a question and we'll add it to the glossary.