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A–Z

Credit & money glossary

The words on a credit report, a denial letter, and a collector’s voicemail. Plain English, tied to FCRA/FDCPA and CFPB/FTC guidance — not a repair-shop script. Jump a letter, then use the matching guide or tool.

A C D F G H I M P R S T

A

Authorized user

Someone added to another person’s revolving account. The primary’s history can appear on your file — good if the card is old, current, and low-utilization; harmful if it is maxed or late. You do not become legally liable as an AU the way a joint account holder does, but your score can still move.

Average age of accounts

How long your tradelines have been open, on average. Closing your oldest card can shrink this. FICO also looks at the age of your oldest account. Do not close clean old cards just to “simplify.”

C

Charge-off

The creditor wrote the debt off as a loss, usually after about 180 days of nonpayment. The debt can still be collected. Charge-offs typically report about seven years from the original delinquency, not from the charge-off date.

Collection

A debt placed with a third-party collector or the original creditor’s collection department. Validate before you pay. Paying does not always delete the tradeline. Medical collections have extra CFPB/bureau rules that have changed in recent years — check current bureau policy and the amount.

Credit freeze

A free, federal right at Equifax, Experian, and TransUnion that blocks most new-credit pulls until you lift it. You must freeze each bureau. It does not close cards you already have. Stronger than a fraud alert for stopping new accounts.

Credit mix

Having both revolving (cards) and installment (auto, mortgage, student) accounts. It is a smaller FICO factor. Do not open a loan you do not need just to “add mix.”

Credit utilization

Revolving balances ÷ revolving limits, usually as a snapshot of statement balances. Under 30% is a common floor; under 10% is often stronger. Pay before the statement closing date, not just the due date. See the utilization calculator.

D

Date of first delinquency (DOFD)

The date the account first went unpaid and never caught up — the clock most collections and charge-offs run on. Collectors cannot legally reset this clock by selling the debt or reporting a new “open” date.

Debt validation

Under the FDCPA, a consumer can require a collector to verify the debt after the first written notice. Use it when you are not sure you owe it, the amount, the original creditor, or the collector’s authority. It is not a “never pay” spell.

Debt-to-income (DTI)

Monthly debt payments ÷ gross monthly income. Mortgage underwriters look at housing (front-end) and all counted debts (back-end). It is not a credit score. A high DTI can kill a loan with an 800 FICO. See the DTI calculator.

Dispute (FCRA 611)

A request that a bureau investigate information that is inaccurate, incomplete, or unverifiable, and correct or delete what they cannot verify. Name the furnisher, account, and the specific fact. Attach proof. This is the real process — not a 609 incantation.

F

FCRA

Fair Credit Reporting Act — the federal law that governs credit reports, disputes, freezes, identity-theft blocks, and how long most negatives may be reported. CFPB and FTC publish consumer guidance on it.

FDCPA

Fair Debt Collection Practices Act — rules for third-party collectors: validation, harassment limits, cease-communication. It generally does not cover the original creditor collecting its own debt.

FICO vs VantageScore

Two scoring families built from bureau data. Lenders choose which model and which bureau. Your “score” is not one number. FICO remains the most used for lending; VantageScore is common in monitoring apps.

Fraud alert

Tells lenders to take extra steps to verify you. Initial alert is typically one year; one bureau notifies the other two. Extended alert (seven years) needs an IdentityTheft.gov report. Weaker than a freeze against new accounts.

Furnisher

The company that sends the data — card issuer, auto lender, collector, etc. You can dispute with the bureau and, under FCRA 623, directly with the furnisher. Use the Direct Dispute letter for that second path.

G

Goodwill letter

A polite request that a creditor remove an accurate but isolated late as a courtesy after the account is current. Not a legal right. Works best with a long on-time history and one ugly month.

H

Hard inquiry

A pull from an application for credit. Typically remains up to two years; impact is largest in year one. Rate-shopping windows exist for mortgages/autos. Checking your own reports is a soft pull.

I

Identity theft report

The FTC report you create at IdentityTheft.gov. It is the document bureaus and furnishers treat as the official identity-theft report for blocking fraudulent tradelines and placing an extended fraud alert.

Installment vs revolving

Installment = fixed payment, fixed term (auto, mortgage). Revolving = open limit, variable balance (cards, HELOCs). Utilization is a revolving metric. Extra auto payments do not cut utilization the way card paydowns do.

M

Medical debt on credit

Bureau and CFPB policy on medical collections has tightened in recent years (paid medical, small-dollar medical). Rules change — verify current bureau practice and dispute reporting that does not match current policy or the facts.

Mixed file

Someone else’s accounts or inquiries on your report (similar name/SSN mix-up). This is a factual error. Dispute it. A freeze plus careful identity details helps prevent repeats.

P

Pay-for-delete

A collector agrees in writing to request deletion if you pay. Many refuse. Never pay first. Get letterhead terms. Paying can still leave “paid collection” if they do not delete.

Public records

Bankruptcies still appear. Civil judgments and tax liens were largely dropped from the three-bureau files in the late 2010s, but court records still exist. Do not confuse the credit file with the courthouse.

R

Rent reporting

On-time rent is not on most files unless a furnisher (Esusu, RentBureau, Boom, Piñata, etc.) reports it. A landlord cannot mail a nice letter to Equifax and create a tradeline. See the landlord/renter guide.

S

Secured card

A card backed by your deposit, which usually sets the limit. Used like a normal card; on-time use and low utilization can build revolving history. Ask whether it reports to all three bureaus and whether it graduates to unsecured.

Soft inquiry

Your own report check, insurance, employers (in many cases), or pre-qualification. Does not hurt FICO the way a hard pull can.

T

Thin file

Too few tradelines or too little history for a stable score. Starter accounts that report (secured card, credit-builder loan, authorized user, rent reporting) exist to thicken the file — not to hide old damage.

Tradeline

One account on the report: creditor, dates, balance, status, limit, payment grid. Audit every line. Duplicates and “not mine” lines are dispute material.