Credit Reports and Credit Scores: Articles and Resources

Credit card debt can lower your score, but it does not necessarily do so. It depends how much debt you have, how you pay on it, and what size credit lines you have.  An important part of your credit score examines your credit utilization, your credit card balances in comparison to the total credit limit your creditors granted you.  Using a high percentage of your available credit hurts your score.

Your credit score is fluid; it changes as your credit information changes. Anytime new information is added to your credit report, your credit score can change. The credit reporting agencies (Transunion, Equifax, Experian) usually update their credit data every 90 days.

Your overall credit history will determine how your credit is affected by having numerous credit cards. However, having an overabundance of credit cards with high balances or credit availability can negatively impact risk scores if your credit history is questionable.

Credit bureaus collect your identification information, employment history, address, payment history, credit inquiries, and any additional public records and data.  Credit bureaus do not record or track income.

The higher your credit score, the better; however, there is no real industry standard.  FICO credit scores range from 350-850. Each creditor/lender judges your credit score differently, assigning greater or lesser weight to various factors when determining your eligibility and/or risk. In the past, anything above 690 was considered a great score. Today, you may need a score of over 720 in order to qualify for the best rates available.  A credit score below a 620 is frequently referred to as "sub-prime."

Any accounts you enroll in a credit counseling are likely to have a notation added to your credit report, indicating that the account is under the supervision of a third party or debt management plan. That notation, in and of itself, does not lower your score. However, lenders and creditors may be hesitant to issue new credit when you are enrolled in the credit counseling program.  Credit counseling is frequently treated by lenders as if  you had filed for Chapter 13 bankruptcy, but it will not hurt your FICO credit score. If you are required to close long-standing accounts or the credit counseling program misses a payment, your score can be harmed.

No. Credit monitoring has no affect on your credit score. It is simply a service that keeps your credit in check. The only time it affects your credit is when you ask a creditor to inquire about your credit.

No. Requesting a credit report will NOT affect your credit. You have the right to look at your credit report without it affecting your credit or score. When you request your credit report it is called a "consumer pull" or even a "soft pull" and has no affect on your credit. The only time when requesting a credit report can affect your credit is when you ask a possible creditor to inquire about your credit. This is because it implies that you are possibly opening a new line of credit.

For a credit card, APR is the effective interest rate charged the borrower for one year, when accounting for the interest that is compounded monthly.

A legal proceeding that may erase your debts, reduce your debts, or place you in a court-mandated debt management plan. The type of relief you receive depends on whether you qualify for chapter 7, 11, or 13 bankruptcy.

Charge-off (sometimes called "write-off") is an accounting term used by creditors when they move a delinquent account from its accounts receivable books to its bad debt ledger. This usually occurs between 180 and 240 days from the date of the last payment. Charge-offs are noted on your credit report. Collection efforts continue after charge-off, though the debt may pass into the hands of a third-party debt collector.

Your credit history is a personal record of your current and  past credit accounts and how they were managed and paid. Credit history is commonly used to predict a person's likelihood of making future payments on time.

A notation on a consumer's credit report showing that some business has requested a copy of the consumer's report.

A snapshot of your financial history that is compiled by a credit bureau and is used by creditors to predict the likelihood that you will repay your debt. Lenders use information from your credit report to decide whether to extend credit to you and what rate to charge if they do lend to you. 

A number assigned to you by a credit bureau that rates your credit history. Key components of your score are: your payment history, how much debt you have compared to how much credit you have been granted, the length of your credit history, and the variety of accounts you have. Your credit score is used by lenders and insurers to determine whether to work with you and what rates you will receive.

Any person or organization to whom a debtor owes money or has a legal financial obligation.

Your credit report will note that you are delinquent if you fail to make the  minimum payment on a loan or debt payment on or before the time agreed. Credit reports note delinquencies by how many months the consumer is behind on the payments, such as  30, 60, 90 or 120 days delinquent.

The FCRA is a United States federal law that regulates the collection, distribution, and use of consumer information. Credit reports and their use are regulated under the FCRA.

Fair Isaac is the company responsible for creating the FICO score. This three digit score is created using information from your credit report and ranges from 300-850. Creditors use the FICO score in evaluating your credit worthiness.

Your FICO score is a mathematical equation/calculation that lenders use to evaluate the risk associated with lending you money. FICO stands for Fair Isaac Company, the company that created the formula originally.

Debt that is owed on an account that can be used repeatedly and that does not need to be paid in full each month.

Verification is the process of checking whether or not data in a credit report is accurate. Verification is initiated by consumers when they question information in their credit report. Credit reporting agencies are required to accept valid documentation from the consumer and eliminate information from the credit report that cannot be verified.