What are Credit Reports and Credit Scores? Key Terminology

Key terms to help you master credit report and scores like a pro.

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A list of credit report and scores key terminology to help you understand credit. Have questions? You can read the answers to the frequently asked questions about credit reports and scores.

Credit reporting company

The credit reporting agencies–more commonly known as credit bureaus–are companies that collect information on individual credit history and financial relationships. Credit bureaus provide access to credit reports for consumers, creditors, and other organizations as allowed by law.  They compile and sell these reports.  

What are the big three credit bureaus?

Credit report

A credit report contains information about your credit, some bill repayment history and the status of your credit accounts. This information includes how often you make your payments on time, how much credit you have, how much credit you have available, how much credit you are using, and whether a debt or bill collector is collecting on money you owe.

Get your federally mandated free credit report. Learn about annualcreditreport.com.

Credit score

A credit score is a numerical representation of your credit history. It makes it easier for lenders to systematically make loan decisions. Credit scores are a reflection of how you’ve handled credit in the past and are used to determine your potential credit relationship in the future. You have more than “one” credit score and multiple credit scores exist used by lenders. All credit scores are generated from information found in your credit report, but how the numerical number is calculated can vary.

Read how to improve credit scores. Get your free credit scores.

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is a Federal law, established in 1971 and revised in 1997, that gives consumers the right to see their credit records and correct any mistakes. The FCRA regulates consumer credit reporting and related industries to ensure that consumer information is reported in an accurate, timely, and complete manner.

How to dispute inaccurate information on your credit report.

No credit / Thin credit file

If you’ve never had credit under your name or a limited credit history, you may hear the terms no credit file or a thin credit file. Consumers with thin or limited credit files may not have enough information to produce a credit score.

Learn how to establish credit or strengthen credit.

Credit inquiry

Credit inquiries are requests by companies such as lenders to check your credit. Soft and hard credit inquiries are two types of information found on your credit report.

You can view your credit inquiries when you request your report on annualcreditreport.com or using a free credit monitoring app.

Tradelines

Tradelines refer to accounts on your credit report. For example, a car loan and credit card found on your credit report would be considered two tradelines.

View your tradelines when you access your credit report on an app.

Fraud alert

If you’re a victim of identity theft or fraud, it’s important to place a fraud alert on all three credit reports. A fraud alert requires creditors who check your credit report to take steps to verify your identity before opening a new account, issuing an additional card, or increasing the credit limit on an existing account based on a consumer’s request. When you place a fraud alert on your credit report at one of the nationwide credit reporting companies, it must notify the others. There are two main types of fraud alerts: initial fraud alerts and extended alerts.

How to place a fraud alert on your credit report.

Identity theft

Identity theft is when your identity is used to commit fraud such as opening new credit accounts, applying for loans, and using your identity to receive benefits. Having your identity used fraudulently can mean use of your personal information such as your name, social security number, or credit card number.

Learn how to spot identity theft. Protect yourself and enroll in a free credit monitoring service with ID theft protection.

Security freeze

Security freezes are designed to prevent a credit reporting company such as Experian, TransUnion and Equifax from releasing your credit report without your implicit consent. This prevents new creditors from accessing your credit file and any others from opening accounts in your name until the freeze is removed.

Learn how to place security freeze.

Credit report monitoring

Credit report monitoring are offered by companies to keep you updated and to monitor activity. The monitoring service looks at important changes on your credit report and notifies you of any potentially suspicious activity.

Download and use a free credit monitoring app like Credit Sesame.

Want to learn more about credit reports and scores? Know your consumer rights under the FCRA.

Jason Vitug

Jason is the founder of phroogal, creator of the award winning project Road to Financial Wellness, and author of the bestseller and New York Times reviewed book, You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

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