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Understand your Credit Report and its components

Not being able to understand and interpret your Credit Report? Just read on to find out how you can do it with ease.

Credit Report is a detailed report of an individual's credit history prepared by a credit bureau. It is used by a Creditor or an Employer to assess the creditworthiness of a consumer.

Components of a Credit Report

On the basis of the Credit Reports issued by the three major Credit Bureaus viz. Equifax, Experian and TransUnion, we can say that any standard Credit Report comprises of the following few components.

  1. Applicant's Information: Generally this section of the Credit Report contains the following points: your full name, any known alias, current and previous addresses, social security number, date of birth, current and past employers. This section contains the basic information of a consumer and helps creditors to judge the authenticity of the consumer. Employment status of the consumer gives some idea about his income potentials. More the consumer is closer to his retirement age; the lesser is his chances of paying back from his salary. Previous address of the consumer is important to verify the future and present financial obligations towards that residence.
  2. Fraud Indicators: Credit Bureaus check the personal information given by consumers, with their own database. This section lists mismatches and is, thus, indicative of the discrepancies and wrong personal information (for example, social security number) submitted by the Consumer.
  3. Profile Summary: This section contains the following credit information: total installment balance, total real estate balance, total revolving balance along with total past due amount, total monthly payment, total real estate payment, total tradeline etc. Profile Summary gives an idea about the current monthly expenses of the consumer towards his existing debts along with total number of inquiries including those conducted during the last 6 months is also noted in this section. This is done so that the lender or user of this report can judge the authenticity of the financial information provided by the debtor. This section also includes the total number of tradelines, divided into satisfactory and derogatory part. This reveals the debtor's responses and attitude towards different lenders on repayment of existing debts.
  4. Credit Scores: Credit score is a number that lenders use to estimate risk. The factors which have been considered to determine such score are also explicitly stated in the Credit Report. It is the core part of the credit report and indicates the actual financial position of the debtors. Higher the score lesser is the risk on disbursal of loan and vice-versa. After considering the financial situation of a consumer, credit bureaus assign a score against each debtor.
  5. Tradelines: This section includes the list of all creditors, like credit-card companies, utility companies and other lenders. The accounts are listed by the type of loan. The date you opened the account, your credit limit or the loan amount; any co-signer of the loan and your payment pattern over the past two years are all stated in this section. Tradelines contain details of each and every loan that the debtor is having currently.
  6. Collection Record: At times creditors lose patience with debtors and the lenders may face problems getting back their loan. This section of the Credit report shows the status whether any debt of the consumer is passed on to collection agency or not. The report marks such accounts as "collection." And if a consumer pays back the collection agency, then the status shows "paid collection." This section rates the seriousness of the debtors towards repayment of particular credit
  7. Recent Inquiries: This section includes the names of those who have obtained copies of your credit report within the past year (two years for employment purposes). This clause helps to indicate the authenticity of the financial data provided to creditors & employers (as the case may be) considered while preparing the report. With the increasing credit number of inquiries your credit score falls, as greater number of inquiries show that people are having doubts about your financial status.
  8. Public Record Information: The information included in this section is as follows: State and country court records on bankruptcy, tax liens, monetary judgments and non-monetary judgments. Bankruptcy, tax liens etc. are determining factors for your credit score. For example, if a debtor has declared Bankruptcy under Chapter 7 or 13 it will put a negative mark on his credit report as it indicates that in future debtor may face similar crisis and the lenders may face problems getting back their loan.

A Credit Report is nothing but a reflection of debtor's behavior towards his debts, highlighting the actual financial strength, weakness, current repayment pattern and future repayment potentiality of the debtor. A good credit report is thus the best key to convince creditors and employers. A consumer thus needs to be more focused on removing the negative points from his Credit Report in order to increase chances of getting easy loans in future.

Thought that I'd place this here to help n00bies u...
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Thought that I'd place this here to help n00bies understand what some of the the Abbreviations/Acronyms/Initials mean.

Feel free to continue the effort in case I miss some (which I know I will), and feel free to expand/correct/comment on the ones I have defined.


Credit Report Account Ratings
I=Installment R=Revolving
0 Too new to rate
1 Pays account as agreed
2 Not more than two payments past due
3 Not more than three payments past due
4 Not more than four payments past due
5 At least 120 days or more than for payments past due
7 Making regular payments under W.E.P
8 Repossession
9 Bad Debt; placed for collection; skip

A.G.: State Attorney General(or S.A.G. State Attorney General: The chief law officer of a nation or state who represents the government in litigation and serves as its principal legal advisor. In most common law jurisdictions, the Attorney General is the main legal adviser to the government, and in some jurisdictions may in addition have executive responsibility for law enforcement or responsibility for public prosecutions.

AU: Authorized User: Is a person added to use a Credit Card owned by another person (Usually a close relative), any charges the person makes on the card, cannot be disputed by the card holder. Also used to help a close family member "Abosrb" some fo the good credit history of the "Card" they are made an AU on as it will be reported on their crdeit report too. Long Historys of Good Credit = Higher Scores

BK7: Chapter 7 Bankruptcy, sometimes call a straight bankruptcy is a liquidation proceeding. The debtor turns over all non-exempt property to the bankruptcy trustee who then converts it to cash for distribution to the creditors. The debtor receives a discharge of all dischargeable debts usually within four months. In the vast majority of cases the debtor has no assets that he would lose so Chapter 7 will give that person a relatively quick "fresh start".

BK13: Chapter 13 Bankruptcy, is also known as a reorganization bankruptcy. Chapter13 bankruptcy is filed by individuals who want to pay off their debts over a period of three to five years. This type of bankruptcy appeals to individuals who have non-exempt property that they want to keep. It is also only an option for individuals who have predictable income and whose income is sufficient to pay their reasonable expenses with some amount left over to pay off their debts

BT: Balance Transfer, The process of moving an unpaid credit card debt from one issuer to another.

BT Promo : A BT at a promotional rate, Card issuers sometimes offer teaser rates to encourage balance transfers coming in and balance transfer fees to discourage them from going out.

BTW: By the way

or : used by someone when they are looking for an answer to the thread, but have not received one yet, and the thread itself is getting pushed back to the second page, where members are less likely to see/read it.

CA: A collection agency is a business that pursues payments on debts owed by individuals or businesses. Some collection agencies operate as agents of other companies, and collect debts for a fee or percentage of the total amount owed. Others work on their own account, purchasing debts from a creditor for less than the dollar amount of the debt and aggressively persuading the debtor to make their payments. A creditor may sell debts to a collection agency in order to remove them from their accounts receivabiles.

CRA's: Credit Reporting Agency, A credit bureau collects and sells information regarding people and their credit history. The company issues credit reports that list a person's creditors and their creditor's history with an individual.

CC: Credit Card.

CCC: Credit Card Company

CMRRR: Certified Mail, Return Receipt Requested

CL: Credit limit.

CO: Charge Off, an Unpaid balance reported as a loss by credit grantor. Usually get sold to a CA or a JDB/JDP (Junk Debt Buyer/Purchaser) and persued as a collection account. The collection agency pays the merchant a fraction of the value of your debt--usually about half of what you owe. The collection agency then attempts to collect more than they paid for the account. The merchant no longer has an interest in the debt (VERY IMPORTANT Point to remember for "Legal" CR reporting purposes. Only an OC (Original Creditor) can report a CO, a CA cant not legally have a charge off because they did not extend the credit but "bought" an investment (this discounted debt) in the hopes of making a profit.)

CRO: Credit Repair Organization:

For purposes of this title, the following definitions apply:

(1) Consumer. -- The term 'consumer' means an individual.

(2) Consumer credit transaction. -- The term 'consumer credit transaction' means any transaction in which credit is offered or extended to an individual for personal, family, or household purposes.

(3) Credit repair organization. -- The term 'credit repair organization'--

(A) means any person who uses any instrumentality of interstate commerce or the mails to sell, provide, or perform (or represent that such person can or will sell, provide, or perform) any service, in return for the payment of money or other valuable consideration, for the express or implied purpose of--

(i) improving any consumer's credit record, credit history, or credit rating; or

(ii) providing advice or assistance to any consumer with regard to any activity or service described in clause (i); and

(B) does not include--

(i) any nonprofit organization which is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986;

(ii) any creditor (as defined in section 103 of the Truth in Lending Act),(5) with respect to any consumer, to the extent the creditor is assisting the consumer to restructure any debt owed by the consumer to the creditor; or

(iii) any depository institution (as that term is defined in section 3 of the Federal Deposit Insurance Act) or any Federal or State credit union (as those terms are defined in section 101 of the Federal Credit Union Act), or any affiliate or subsidiary of such a depository institution or credit union.

(4) Credit.--The term 'credit' has the meaning given to such term in section 103(e) of this Act.(6) [/quote]

CU: Credit Union, a Banking organization that is run as a collective and or CO-OP and owned by the members.

CW: Credit Watch, a monitoring service offered by Equifax, a CRA

DCC: debt consolidation Care. The team and forums that you just so happen to be reading this thread from. A place to seek help and understanding about your debt burdens.

Derog: Derogatory TL (Tradeline) = an item on your credit file that is negative in any way.

DH - Dear Husband (Also See DW and SO)

DOLA: Date Of Last Activity, the date that will determine when an account ceased activity and sets SOL in some cases and/or determines at what date the account is colsed or will be placed for collections.

DV or VOD Debt Validation/Validation Of Debt, according to Fair Debt Collection Practices Act Paragraph 809 Quote:

- Validation of Debts:

"(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing:

1. the amount of the debt;
2. the name of the creditor to whom the debt is owed;
3. a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
4. a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
5. a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

"(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

"(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer. "

DW: Dear Wife

EQ: Equifax, A Credit Reporting Agency (CRA)

EXP (or EX): - Experian. Another CRA.

FCRA: Fair credit Reporting Act

fdcpa: Fair Debt Collection Practices Act

FI: Your Fiancé/Fiancée.

FICO Score: FICO® Score is a scoring system developed by Fair Isaac & Co. used on debt payment information. Credit scoring is a method of determining the likelihood that credit users will pay their bills, and has become widely accepted by lenders as a reliable means of credit evaluation. A credit score converts a borrower's credit history into a single number. Late payments, the amount of time credit has been established, the amount of credit used versus the amount of credit available, length of time at present residence, employment history, and negative credit information such as bankruptcies, charge-offs and collections are all factors used in calculating the score.

GC: The Green Card from Certified Mail that you get in return for proof of when dilivered and who signed for it. Legally acceptable in court for proof of delivery.

GWL: A Goodwill Letter or correspondence to get late payments removed, due to some unfortunate event in your life that caused the late payments, from your current and positive tradelines.

"Hard" Inquiry: Inquiry visible to others and counted in your credit score.

IMHO: In My Humble Opinion

IIB: Included in Bankruptcy, an account definition, is viewed as a negative listing.

JDB: Junk Debt Buyer. Buys debts for pennies on the dollar and attmepts collection.

LOC: Line of credit.

LOL: laughing out loud

OC original creditor

OT Off Topic

PIF: Paided/Pay In Full, the act of paying a ballance that is out standing the full amount owed, leaving a $0 balance.

PITA: Pain In the Butt* (*Self-censored-LOL)

PFD: Pay For Deletion. Offer of payment in exchange for removing negatives. For this to be effective, it is recomended to get this agreed to in writing before mailing/sending final payment.

ROFLMAO: (rolling on the floor laughing my *Butt off) (*Self-censored-LOL)

SO: Signifcant Other. The other person in your life while not in a Maried Relationship. Some legal options are not avaialbe to non-Married couples depending upon your State of residence.

SOCK DRAWER: Where you put CC's that you won't be using for a while, for whatever reason, usually due to the CCC not playing nice, or you just using as an available good TL on your report, used for small purchases and PIF each month.

"Soft Inquiry": inquiry not seen by others and not counted in your score.

SOL: Statute of Limitation: statutorily set maximum time periods during which lawsuits can be brought to enforce rights. After the time period set out in the applicable statute of limitations has run (expired), no legal action can be brought.

TL: Tradeline, An entry in your credit history.

TU: Transunion. Another CRA.

UDF: Universal Data Form. Its the form that the subscribers (collectors, creditors, etc.) use to the CRAs use to update/delete tradelines. This is a complicated form requiring exact entries. CA's cause many errors to be reported on a CR due to poor training, abuse, misuse, etc. using this form and is why it is VERY import to always check you credit reports and challange any thing not reporting correctly as "NOT MINE" to the CRA to try to force them to be reported correctly. If the entry cant not/will not be corrected it is your right to demand any "INCORRECT" information removed form your CR under the FDCPA up to and including "DELETION" of the entire entry.

Jerry Great and very useful Post :)

As I earlier said

SSEWBA - Someday Soon, Everything Will Be Acronyms


Sub: #1 posted on Sun, 05/08/2005 - 10:08

Vikas Vikas

(Posts: 2022 | Credits: )

Hi Jerry,

This is a great piece of information from you Jerry. We can use this for our "debt glossary section". As usual great contribution Jerry. :D Keep up with this exemplary spirit of involvement.:D


Sub: #2 posted on Sun, 05/08/2005 - 19:54

Jason Jason

(Posts: 2431 | Credits: )

Thanks Jerry

This was really nice from your side. :D Great post


Sub: #3 posted on Mon, 05/09/2005 - 10:59

roxette roxette

(Posts: 4009 | Credits: )

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