Credit Report Terminology
Algorithm
A complex mathematical model. In credit scoring, it is used to compare data in millions of credit reports and predict a person's likelihood to repay debts.
Application scoring
The use of a statistical model to objectively evaluate and “score” credit applications and credit bureau data in order to assess likely future performance. It is a decision making tool to help businesses make decisions such as whether to accept or decline the application.
Bankruptcy
A proceeding in Bankruptcy Court that may legally release a person from repaying debts owed. Credit reports normally include bankruptcies for up to 10 years.
Charge-off
The balance on a credit obligation that a lender no longer expects to be repaid and writes off as a bad debt.
Collection
Attempted recovery of a past-due credit obligation by a collection department or agency.
Consumer credit file
A credit bureau record on a given individual. It may include: consumer name, address, Social Security number, credit history, inquiries, collection records, and public records such as bankruptcy filings and tax liens. This is the basis for your credit report.
Credit bureau
A credit reporting agency that is a clearinghouse for information on the credit rating of individuals or firms. The three largest credit bureaus are Experian, Equifax, TransUnion
Credit bureau risk score
A type of credit score based solely on data stored at the major credit bureaus. It offers a snapshot of a consumer's credit risk at a particular point in time, and rates the likelihood that the consumer will repay debts as agreed. Each credit bureau generates a different credit score using proprietary scoring models.
Credit history
A record of how a consumer has repaid credit obligations in the past.
Credit obligation
An agreement by which a person is legally bound to pay back borrowed money or used credit.
Credit report
Information communicated by a credit reporting agency that reflects on a consumer's credit standing. Most credit reports include: consumer name, address, credit history, inquiries, collection records and any public records such as bankruptcy filings and tax liens. This is not the same as a credit score. See Credit Score.
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