Important Credit Phrases and What They Mean

I’ve been writing about consumer credit for several years and have lost count of how many articles have my name at the end of them. I am guilty, as are many industry-generated journalists, of writing in the same language that I speak when talking to industry players. This sometimes leaves others wondering what in the world some of my lingo means. So, for this article I’m going to define some of the more common credit phrases and what they mean in my world.

I9, R9, O9 – The alpha portions define the type of account. The "I" stands for Installment.  The "R" stands for Revolving and the "O" stands for Open. Open, in this case, means that the bill is due in full and has a variable balance.

3rd Party Collection – A 3rd party collection occurs when a lender or merchant outsources the collection a debt to a completely independent company. This shows up on a credit report, likely all three credit reports, as a different account from the original loan/account with the merchant.

FICO – FICO is an acronym for Fair Isaac Corporation. Today Fair Isaac is simply known as FICO. And FICO, as you may know, is the generally recognized standard credit score sold by all three of the credit reporting agencies.

Public Record – A public record in the credit world has a very specific definition. It’s a record of a tax lien, a judgment, or a bankruptcy.  And while there are many other examples of public records (divorces or property taxes, for example), when it comes to credit reporting those are the only three that matter

I’ll continue next week with four more credit phrases. If you have any request please feel free to send them to me at AskJohn@credit.com

John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.

Comments

[Superfreak]

That John guy sure is smrt