15 Credit Report Terms To Know

Do you find your credit report a little intimidating?

It’s probably because it uses terms that you don’t use in casual conversation.

Here's a partial list of terms you may not understand when reading your credit score.

Account Condition: If you’re currently making on-time payments, your account condition is open. If you’ve already paid it off, it’s listed as paid. The term simply indicates the status of the account.

Authorized User: If you allow your child to make charges using your credit card, they are an authorized user. The credit entry appears on both the primary cardholder’s and the authorized user’s credit report.

Balloon Payments: If you have a loan with a balloon payment, you’re going to be making a single lump-sum payment at the end of the loan period.

Capacity: Capacity is your likelihood of paying off a loan. Your credit report doesn’t contain information about your income but capacity might be used in a lender’s credit decision.

Charge-Off: If you didn’t pay off a loan, a lender may call the loan a loss and remove it from their books—a charge-off. However, don’t expect the lender to stop hounding you for payments.

Related: 6 Ways to Save on Lawn Care

Co-maker: Although legally not the same, in practice a co-maker serves the same role as a co-signer. In the event that the primary borrower is delinquent in payments, the co-signer or co-maker will have to assume payments.

ECOA: The Equal Credit Opportunity Act. You can find an explanation of it here.

Generation Identifier: Are you a “Jr”, “Sr” or “I, II, or III?” These are generation identifiers.

Installment Credit: A loan where payments are made consecutively at agreed upon intervals. Translation: Probably every loan you have.

Obsolescence: The amount of time negative information remains on your credit report. Bankruptcy remains for 10 years and nearly everything else, seven years.

Personal Statement: Want to explain a negative entry in your report? You can include a personal statement for inclusion on your credit report.

Recent Balance: Your most current balance as reported by the creditor. This will lag your actual balance.

Reported Since: the first time the creditor started reporting the account to the creditor.

Revolving Account: Credit is automatically approved by the lender up to a certain amount. The best example is a credit card.

Secured Credit: There’s collateral involved. Maybe you pledged your home as collateral to receive the loan.