This glossary lists definitions of common terms and abbreviations related to credit reports, credit scores, and identity theft in alphabetical order.

• Active Duty Alert - If you are a member of the military and away from your usual duty station, you may place an active duty alert on your credit report to help minimize the risk of ID theft while you are deployed. When a business sees the alert on your report, it must verify your identity before issuing credit. To place an active duty alert on your report, or to remove the alert, contact one of the three main credit bureaus.
• AnnualCreditReport.com - mandated by the FACT Act of 2003, AnnualCreditReport.com is the only official website that allows consumers to obtain their credit reports once every 12 months free of charge from each of the nationwide credit bureaus. The free credit reports do not include your credit score however. If you wish to get your credit score with your report, the credit bureaus charge a fee to disclose your credit score.
• APR - Annual Percentage Rate, or interest rate, is the actual cost of a loan or line of credit expressed as an annual percentage.
• APY - Annual Percentage Yield, is the interest rate earned on a deposit account for a period of one year that takes into account the effect of compounding, which is why the APY is usually higher than the “normal” interest rate on that account.
• ATM - an Automated Teller Machine is an electronic terminal or device that performs basic banking functions, such as accepting deposits, cash withdrawals, and providing account balance information.
• CLUE - a Comprehensive Loss Underwriting Exchange report is your insurance report with the five-year history of claims filed on your house or car. Similar to your credit report, you may get a copy of your CLUE report free once a year at www.choicetrust.com.
• Collection Agency - also called debt collection agency, is a business that pursues payments on debts owed by individuals or businesses. These companies are usually hired by a creditor to collect past due debts, and these agencies at times use more aggressive collection tactics than the original lender.
• Credit Bureau - aka Credit Reporting Agency, or Consumer Reporting Agency, or consumer credit reporting company, is an organization that gathers and maintains a history of credit data, such as financial and public records information, on individuals and firms. The Credit Bureaus also provide this information to authorized users such as banks, creditors, landlords, insurance companies, and prospective employers for a fee. The three main credit bureaus in the US are Equifax, Experian and TransUnion.
• CRA - Credit Reporting Agency or Consumer Reporting Agency. See Credit Bureau.
• Credit File - see Credit Report.
• Credit Freeze - see Security Freeze.
• Credit Monitoring Service - these services watch your credit file and notify you when something unusual appears on it. Credit monitoring may provide early detection of unauthorized activity to limit the amount of financial damage you may suffer, however they cannot prevent identity theft from occurring. The services, which typically cost around $150 per year, offer convenience by performing monitoring tasks that consumers could do for themselves, but may not have the time or inclination.
• Creditor - also known as credit grantor or lender. See Lender.
• Credit Report - also called credit file, your credit report details your credit history as it has been reported to the CRA by credit grantors who have extended credit to you. Your credit report lists what types of credit accounts you have, the age of your accounts, whether you’ve paid your bills on time, and how much credit you’re using. Along with your name, date of birth and social security number, the credit report lists all your open and closed accounts, your current and past addresses, your current and past employers, any recent inquiries made by creditors. Additionally, your credit report will also list any bankruptcies, collections, charge offs, judgments, etc.
• Credit Score - the credit score is a 3-digit number assigned to you by the Credit Bureaus. It’s a numerical summary reflecting your credit-worthiness and is calculated based on the information in your credit file. This score is used by creditors, lenders, and others as a “snapshot” of your risk at that point in time, and it changes as time goes on since your credit history and your credit file change with time. The best-known credit scoring system is called FICO. See Your Credit Score for more information.
• Dumpster Diving - one of the methods used by identity thieves. Dumpster divers rummage through trash to recover discarded bank and credit card statements, pre-approved credit card offers, or any other personal information, which they use to carry out Identity Theft.
• ECOA - Equal Credit Opportunity Act, US law that prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives benefits from a public assistance program.
• Equifax - is one of the three main Credit Bureaus (CRA) in the US. The others are Experian and TransUnion. Website is equifax.com
• Experian - is one of the three main Credit Bureaus (CRA) in the US, formerly part of TRW. The others are Equifax and TransUnion. Website is experian.com
• FACT - see FACTA.
• FACTA - aka FACT Act, the US Fair and Accurate Credit Transactions Act of 2003.
• FCBA - Fair Credit Billing Act.
• FCRA - Fair Credit Reporting Act.
• FICO - also FICO score, is the original credit score developed by Fair Isaac Corp. There are other credit scoring systems similar to FICO, but the most widely-used score in the US and Canada is the FICO. FICO scores range from 300 to 850. Anything above 700 is good, 760 or above is considered excellent. If your score is above 800, you are an omnipotent borrower, and banks will beg you to take their money. A poor or “sub-prime” credit score is usually 620 or below. NOTE: these thresholds are only provided as a guide, since each lender has its own “poor”, “good”, or “excellent” credit tiers.
• Fraud Alert - aka initial fraud alert or initial security alert. You can request a credit bureau place a fraud alert on your credit report, and it can be added if you suspect you have been, or are about to be, a victim of identity theft. An initial fraud alert stays on a credit report for at least 90 days and requires companies to verify a person’s identity before extending credit. This is a good way to lower your risk for ID theft, but the main drawback is that you have to renew it every 90 days.
• Free Credit Report - see AnnualCreditReport.com.
• FTC - Federal Trade Commission.
• Hard Hit - aka hard inquiry, is an inquiry against your credit report by a lender in response to your application for a loan or credit, and is listed under Inquiries in your credit report. A number of hard inquiries within a relatively short time will have a negative impact on your credit score.
• HELOC - a Home Equity Line Of Credit is a real estate secured loan that provides a line of credit based on your property’s available equity and uses it as collateral.
• Identity Theft - also ID Theft, is defined as having someone assume your identity to commit financial fraud. Identity thieves may use your information to rack up charges to your accounts, apply for loans or open new credit card accounts in your name, eventually destroying your credit. If you become a victim of ID Theft, very often it can take months to remove any inaccuracies in your credit report and clear your name. See ID Theft for more information.
• Initial Fraud Alert - see Fraud Alert.
• Initial Security Alert - see Fraud Alert.
• Innovis - a credit reporting agency (CRA). It’s sometimes called the fourth or “secret” credit bureau in the US because it’s not considered one of the three main bureaus: Equifax, Experian and TransUnion. Website is innovis.com.
• Inquiry - see Hard Hit.
• Installment Debt - also installment account, is a loan that is repaid according to a schedule of payments, usually on a monthly basis, and over a fixed period of time. Mortgages and auto loans are examples of Installment Debt.
• IRS - Internal Revenue Service, the US federal agency responsible for collecting taxes and enforcing tax laws.
• Lender - credit card issuers, finance companies, retailers, banks, and other institutions that extend credit to borrowers. These lenders, also known as creditors or credit grantors, send updates regarding their customers’ (or borrowers’) account details, such as payment history and account status, to the credit bureaus on a regular basis.
• LexisNexis - is a major provider of business information in the areas of legal, risk management, corporate, government, law enforcement, accounting and academic. They also compile and provide such information as public records, unpublished opinions, legal documents, news from archived newspapers, magazines, publications, and information from other printed sources. And similar to a credit bureau, Lexis compiles files on individuals containing not only names, SSN, DOB, addresses, phone numbers, and employer information, but also lists of relatives, business and personal associates, neighbors, and other public and non-public information.
• Opt out - also opting out, is the process of removing your credit file from being available for prescreening by credit and insurance companies looking to market their products. When you opt out, you’ll reduce the number of unsolicited credit and insurance offers you receive, usually through the mail. You may opt out of receiving these prescreened offers, for either a period of 5 years or permanently, by either calling 1-888-5-OPTOUT (888-567-8688), or online at www.optoutprescreen.com. Doing so will not affect your credit score or your ability to obtain credit or insurance, and if you change your mind you can use the same phone number or website above to opt back in. Note that even if you opt out, you may still receive offers which are not based on your credit report.
• Prescreen - also prescreening, is the credit bureaus’ practice of selling lists of potential customers to credit and insurance companies for the purpose of making prescreened or preapproved offers of credit or insurance products to those customers who meet certain criteria, such as a minimum credit score. You may choose to remove your credit file from the prescreening process by opting out; see opt out above for details.
• PIN - a Personal Identification Number issued by banks and other financial institutions for use by a customer as a form of password to conduct transactions on an ATM or phone. Credit bureaus will issue a PIN to persons placing a Security Freeze on their credit report.
• Revolving Debt - also revolving account, is debt that does not have a fixed payment, but rather varies depending on the outstanding balance and the interest rate on the account. Unlike installment accounts, the borrower can repeatedly use the credit line on the revolving account, and it can go on indefinitely as long as the account is in good standing. Credit cards and HELOC are examples of Revolving Debt.
• Security Freeze - aka credit freeze, a method for preventing a credit bureau from disclosing your credit report to third parties, such as finance companies and lenders, as an additional deterrent against identity theft. The freeze will remain in effect until you request to remove or “unfreeze” it. You also have the option to temporarily lift the security freeze in case you need to have a third party have access to your credit report, such as when you apply for new credit or to allow a prospective employer run your report. You will be issued a PIN to be used each time you want to lift the freeze. Depending on your state, the bureaus can charge a fee everytime you place a freeze as well as for lifting it. There is generally no fee if you can prove that you’re a victim of ID theft. The ability to freeze your credit report is currently - or will soon be - available to residents in 35 states and Washington DC (as of 2008). Check for your state here.
• Shoulder Surfing - another method used by identity thieves, which is simply looking over your shoulder as you’re keying in private and sensitive information, such as your PIN at a bank ATM machine, or even your password on a computer.
• Soft Hit - aka soft inquiry, is an inquiry against your credit report initiated by you to review your own credit file, or by credit card lenders and others looking to market their products to you. Soft hits do not affect your credit score.
• Spam - junk email, usually unsolicited, and usually commercial in nature.
• SSN - Social Security Number, the nine (9) digit government-issued identification number assigned to every citizen in the US, and most immigrants. Because it is unique for each individual, the SSN is used as a key piece of identifying information by the IRS and many other government agencies, as well as credit bureaus, banks, credit card and insurance companies, hospitals, and many other organizations.
• TIN - Taxpayer Identification Number used to identify an individual or entity for income tax purposes. Your Social Security Number (SSN) is a type of TIN.
• TransUnion - is one of the three main Credit Bureaus (CRA) in the US. The others are Experian and Equifax. Website is transunion.com
• TRW - is an automotive and electronics corporation whose information services unit was sold in 1996 and subsequently renamed to Experian, now one of the 3 main credit bureaus.
• USPS - United States Postal Service. www.usps.com