The Language of Credit Reports: A Plain-English Glossary

Credit Bureau

A company that collects and maintains consumer credit data from lenders and public records. The three major bureaus in the U.S. are Equifax, Experian, and TransUnion. Each may hold slightly different information, which is why your reports across bureaus can differ.

Credit Utilisation Ratio

The percentage of your total available revolving credit (such as credit cards) that you are currently using. It is calculated by dividing your total balances by your total credit limits. This ratio is a significant factor in most credit scoring models.

Charge-Off

When a creditor writes off a debt as a loss — typically after 120 to 180 days of non-payment — and removes it from their active receivables. A charge-off is a serious derogatory mark on your report. Importantly, the debt is not erased; it may still be collected or sold to a third party.

Derogatory Mark

Any negative item on your credit report that signals a history of missed payments or credit mismanagement. Examples include late payments, collections, charge-offs, bankruptcies, and civil judgments. Most derogatory marks remain on your report for seven years.

Hard Inquiry

A formal review of your credit report triggered when you apply for new credit, such as a loan, credit card, or mortgage. Hard inquiries can temporarily lower your credit score by a small amount and are visible to other lenders for up to two years.

Soft Inquiry

A credit check that does not affect your credit score. Soft inquiries include checking your own report, pre-qualification reviews by lenders, and background checks by employers. Only you can see soft inquiries on your own report.

Account Status

A field on each tradeline indicating the current standing of that account. Common statuses include 'Open,' 'Closed,' 'Current,' 'Delinquent,' 'In Collections,' and 'Charged Off.' Lenders review account statuses to assess your repayment history.

Tradeline

A record of a credit account on your credit report. Each tradeline includes the lender's name, type of account, credit limit or loan amount, account status, and payment history. Your report may contain many tradelines across different account types.

Collections

An account that a creditor has transferred to a collection agency after extended non-payment. The collection entry appears as a separate derogatory item on your report and can significantly damage your credit score. It typically remains for seven years from the original delinquency date.

Payment History

A record of whether you have paid each account on time. It is generally the most heavily weighted factor in major credit scoring models. Even a single late payment can noticeably affect your score, depending on your overall credit profile.

Credit Mix

The variety of credit account types shown on your report, such as revolving accounts (credit cards) and installment accounts (auto loans, mortgages, student loans). A diverse mix may have a modest positive effect on your score, though it is a relatively minor factor.

Age of Credit History

A measure of how long you have held credit accounts, typically averaged across all open accounts and sometimes including the age of your oldest account. A longer credit history generally signals more experience managing debt and can positively influence your score.