Plain-English definitions for the terms you'll encounter on your financial journey.
The average length of time your credit accounts have been open, which influences your overall credit score.
A numerical indicator of a company's creditworthiness, used by lenders and vendors to evaluate risk.
The amount of time your credit accounts have been established, which factors into your overall credit score.
The process of trying to improve a person's credit score by disputing errors or inaccuracies on their credit report.
A numerical expression based on an analysis of a person's credit files, representing their perceived creditworthiness to lenders.
The percentage of your total available credit that you are currently using, which is a major factor in credit scores.
A government-backed mortgage insured by the FHA that allows borrowers with lower credit scores and smaller down payments to qualify for home financing.
A credit check that happens when you apply for credit, which can cause a small, temporary dip in your credit score.
The track record of whether a borrower has made their credit payments on time, usually the most important factor in a credit score.
A credit check that does not affect your credit score, often used for background checks or pre-approved offers.
A credit check that occurs as part of a background check or pre-approved credit offer, which does not affect your credit score.
A person with a low credit score who is considered a higher risk for lenders. Because of this risk, they are often charged higher interest rates on loans.
A loan offered to individuals with lower credit scores at higher interest rates to compensate the lender for the increased risk of default.
The percentage of your total available credit that you are currently using, which significantly impacts your credit score.