Reviewing your credit report is a step in the right direction toward financial stability. A thorough check of your credit history can help you plan for future investments and develop a strategy to establish good credit.
However, the alphabet soup present in credit reports can leave many people feeling confused and overwhelmed. To help you fully understand the financial acronyms contained in these documents, we’ve put together a description for some of the most common terms and abbreviations.
To identify you and your credit history, credit reporting agencies (CRAs) compile your name, address, Social Security number, date of birth and employment information into one section on your credit report. Be sure to thoroughly examine this section to ensure your personal information is correct and up to date.
Your credit report will show a history of each credit account you have, including the date the account was opened, the credit limit, account balance and payment history. There are three different types of account classifications.
- Mortgage accounts–these include mortgages, home equity loans and any other loans secured by real estate that you own.
- Revolving accounts–revolving accounts are charge accounts that have a credit limit and require a minimum payment each month. This includes most credit cards.
- Installment accounts–installment accounts are credit accounts in which the amount of the payment and the number of payments are predetermined or fixed, such as a car loan.
Accounts are separated into “positive” accounts and “negative” accounts to make it easier to interpret your report. This snapshot of your accounts will show a summary including debt, late payments, balances and default.
- APR – Annual percentage rate is a measure of how much interest credit will cost you, expressed as an annual percentage.
- AUD – An Automated Universal Data form is used by lenders and collection agencies to correct or modify information on a credit report. If there are inaccuracies on your report, this is the form that would be used to correct them.
- BAL – Balance owed as of reported date.
- CS – Type and current status of account.
- DLA – Date of last activity; either payment or purchase.
- ECOA – The Equal Credit Opportunity Act is a federal law that prohibits creditors from discriminating against credit applicants on the basis of sex, marital status, race, color, religion, age and/or receipt of public assistance.
- FCRA – The Fair Credit Reporting Act defines your rights regarding free annual credit reports and having errors corrected.
- FICO – Fair Isaac Corporation uses software to calculate your FICO score. The FICO Score is the standard credit score and is used in more than 90 percent of lending decisions.
- FIRM/ID CODE – Name and customer number of reporting company.
- H/C – Indicates high credit; on revolving accounts this may indicate your credit limit.
- MR – Months reviewed; usually the number of months an account has been reported to credit agency.
- OPND – Date account was opened.
- PACER – Public Access to Court Electronic Records is used by the credit reporting agencies to collect bankruptcy information, which is then placed on consumer credit reports.
- P/D – Past due amount as of reported date.
- RPTD – Date item was reported to credit agency (often occurs monthly).
Be sure to access your credit report at least once a year to ensure your personal information is accurate, your accounts are secure and your credit usage fits within your means. By doing so, you will put yourself on the path to financial security.