Consumer Credit Reports Key Terms

Learn the terminology so that you can understand your credit report

Consumers can view their FICO scores by ordering a copy of their credit report. It's important to keep tabs on your credit score because the credit score affects your ability to secure loans at the best rate. A mistake on a credit report could cost you thousands of dollars over time. Consumers are entitled to receive their credit report to see what is on it and to check for errors. When doing so, it's good to know the common terms that are associated with a credit score.

 

FICO score

FICO stands for Fair Isaac Corporation, which is the company that created the idea of the credit score. A FICO score, or credit score, is a measure of a consumer's credit-worthiness, showing lenders the amount of debt an individual has, as well as past performance with other creditors. The full picture allows lenders to make a decision about lending.
Try: At the Fair Isaac Corporation, you can see what goes in a credit score. This helps you to know which areas you need to work on to build a higher credit score.

Experian, TransUnion and Equifax

Experian, TransUnion and Equifax are the three companies that create and maintain credit scores. The information at each of these companies may be different, so when you order your credit score, make sure that you look at the score from each of these companies.
Try: Learn more about Experian, TransUnion and Equifax from their company websites.

Forced continuity

When you order a "free" credit report, you need to watch out for forced continuity programs. Typically, in a forced continuity program with credit reports, you must sign up for a free trial of a credit monitoring service in order to get your credit score. If you don't cancel, you will be billed monthly for this service.
Try: Ken McCarthy explains forced continuity and gives a good example of the process from a consumer's point of view.

Credit repair

Credit repair involves taking steps to improve your credit score. In most cases, in order to improve your credit, you'll have to pay your bills on time. However, if you find that there are mistakes on your credit report, fixing them can instantly improve your score. Consumers can do this themselves, and should be careful of scam companies offering to do this for you.
Try: The Federal Trade Commission offers advice on how to fix errors on your credit score.

Delinquent

A delinquent account is one where you have been late making payments. This shows on your credit report and negatively impacts the score.
Try: Bills.com explains delinquent accounts and how to remove them from your credit score.

Revolving and installment

There are two types of debts that credit companies list on your report - installment and revolving. Installment debts are those that have a fixed payment over a period of time, such as student loans, car loans and home mortgages. Revolving debt varies over time, such as credit card debt.
Try: DebtHelp.com explains the difference between revolving and installment debt.

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