Polish your vocabulary to understand online credit score better

Reading a credit score online or Credit Information Report (CIR) could spin the reader’s head. We all know that the key to a good credit score are paying bills on time, having a mix of accounts (credit cards and loans), and keeping these accounts in good standing for years.

Primarily, the credit score report can be classified into current credit, credit inquiries, public records and identifying information. But unfortunately, not knowing what is in the credit report or not being able to understand it could cost the applicant shell out unnecessary money. 

Let’s get into what’s actually on the credit score report for the benefit of applicants who opt for on credit score online.

1. 120 Days Past Due: If the applicant or the borrower has missed a scheduled payment on an account by 120 days, the lender may report the Payment Status as 120 Days Late. This negatively impacts your score. Other similar terms are 150 Days Past Due, 180 Days Past Due, 30 Days Past Due, 60 Days Past Due and 90 Days Past Due.
2. Charge-off: It is a balance on a credit report that a lender no longer expects to be repaid and writes off as a bad debt.
3. Credit mix: Credit mix refers to the types of secured and unsecured loan accounts that make up a consumer's credit report. Credit mix determines 10% of a consumer's score.
4. Debt ratio: It equals combined monthly debt payments divided by gross monthly income.
5. Foreclosure: Foreclosure refers when a borrower prepays the outstanding loan amount before the scheduled equated monthly instalments.
6. Settlement: When a debt is settled by the applicant, it is updated in the credit report to show a status of ‘Settled’ or ‘Paid Settled’.
7. Paid collection: An account that went into collections due to delayed payment.
8. Thin credit file: This means a person does not have a credit history to produce a credit score. Having a thin file can make it difficult to get credit or pre-approved loan.
9. Voluntary Surrender: If the applicant is unable to make the loan payment (e.g. for a car), the lender takes back the vehicle.Voluntary surrender is viewed negatively by most lenders, and may have a negative impact on the applicant’s credit score.
10. These are some of the commonly used terms used by credit score online companies. Hope these jargons come handy to most applicants.

Meanwhile, for more information log on to https://creditsscore.in.