A
Adverse Action Letter (also called Declination Letter)
A notice sent to the person whose credit is being checked that they have not met the criteria for approval (for a specific purpose), based on information in their consumer credit file. The notice indicates which credit bureau was used, and how to contact them. The individual is entitled to a free credit report if credit has been denied in the last 60 days.
B
Bankruptcies
The legal process by which a person or corporation declares the inability to pay their debts. Any available assets are turned over to a bankruptcy trustee to be used to pay off outstanding debts.
Business/Commercial Account (with E-Renter)
Business or commercial accounts must meet specific requirements and have gone through the verification process. A business/commercial account allows receipt of full detailed credit reports including FICO scores, as well as background information such as criminal records, sex offender records and evictions. Business account requirements include: business license or articles of incorporation, publicly listed business telephone number verifiable in a business directory (such as the yellow pages), business bank account, submission of a completed application, and on-site inspection.
Business Credit Report
This credit report indicates the credit record and credit worthiness of a company.
C
Charge-Off
A charge-off occurs when a creditor decides that a debt is unlikely to be repaid, and considers it a loss for accounting purposes.
Commercial/Business Account (E-Renter)
Commercial or business accounts must meet specific requirements and have gone through the verification process. A commercial/business account allows receipt of full detailed credit reports including FICO scores, as well as background information such as criminal records, sex offender records and evictions. Commercial account requirements include: business license or articles of incorporation, publicly listed business telephone number verifiable in a business directory (such as the yellow pages), business bank account, submission of a completed application, and on-site inspection.
Consumer Reporting Agency
A consumer reporting agency (CRA) is a company that gathers and stores personal credit histories, and provides credit reports upon request to its customers. The three main credit reporting agencies are Equifax, Experian, and Trans Union. Credit reporting agencies are subject to the Fair Credit Reporting Act, and they take care to ensure that their customers are legitimate businesses and financial institutions having a permissible purpose to request credit reports.
Co-Signer
A person who has co-signed for a loan, and will be responsible for payment if the borrower should default.
Credit Bureau
A credit bureau is a company (or, sometimes, an organization of local merchants) that provides credit reports to its members. Most towns once had their own local credit bureaus. The records were kept manually, and the credit reports were often done verbally. Over the past 20 years, most local credit bureaus have been acquired by Experian, Equifax, and Trans Union. Those that remain independent, in most cases, have an affiliation with one of the three nationwide bureaus. The term credit bureau, as commonly used, refers to any of these organizations.
Credit Check
A credit check is based on the information found in a consumer credit file (including review of FICO score). It does not provide a detailed credit report or the actual credit score.
Credit Report
A report designed to indicate show existing debts and how well past debts have been repaid by an individual. It also lists the companies that have inquired about credit recently, and public records such as bankruptcies, judgments, and foreclosures. To the extent provided by creditors and other sources, a credit report also includes current and prior addresses, current and prior employment, and identification information such as date of birth, and social security number.
Credit Score
A computerized evaluation of credit worthiness, expressed as a number. A credit score is based on the contents of one or more credit reports from Equifax, Experian, or Trans Union. A credit scoring model adds and subtracts points based on factors such as how many and what types of accounts exist, how close the person is to their credit limits, how many times payments have been late, severity of delinquencies, and recent levels of activity in applying for credit. See also FICO, Vantage Score.
Criminal Records
The term generally refers to a summary of contact with law enforcement agencies by the individual. The availability of criminal records varies according to the level of the agency involved (county, state, federal), and the jurisdictional reporting methods and requirements.
D
Decisioning
Automated evaluation of credit applications, with decisions such as pass or fail, approve or disapprove, being displayed.
Declination Letter (also called Adverse Action Letter)
A notice sent to the person whose credit is being checked that they have not met the criteria for approval (for a specific purpose), based on information in their consumer credit file. The notice indicates which credit bureau was used, and how to contact them. The individual is entitled to a free credit report if credit has been denied in the last 60 days.
Derogatory
Negative information on a credit report.
E
End User (of a Credit Report)
An end user is a company or financial institution that has ordered a credit report. (The end user is prohibited from showing the report to anyone else without a permissible purpose.) When a credit report reseller gets a credit report from a credit reporting agency, it must indicate the end user, and the end user’s permissible purpose, so that this information can be disclosed in future credit reports.
Equifax
Equifax is one of the three nationwide credit reporting companies. It is headquartered in Atlanta, Georgia, and employs 5,000 people in 13 countries, with $1.1 billion in annual sales.
Evictions
The legal process used by a landlord to remove a tenant from physical possession of rented property. The legal actions required to begin the process of eviction varies according to the state and local laws where the property is located.
Experian
Experian is one of the three nationwide credit reporting companies, created in 1996 when TRW sold-off its credit reporting business.
F
FCRA (Fair Credit Reporting Act)
The Fair Credit Reporting Act is Federal law regulating the collection, use, and distribution of consumer credit information. FCRA was enacted in 1970, and substantially amended in the late 1990s and in 2003, and forms the basis for all consumer credit rights. The law is intended to ensure privacy and accuracy of credit reports. FCRA regulates activities by consumer reporting agencies, by any person or company providing information to those consumer reporting agencies, and by any person or company using the information for credit, employment, or insurance purposes. FCRA also provides consumers the right to periodically review and have errors corrected in their credit records. The Fair and Accurate Credit Transactions Act of 2003 allows consumers to have easier access to view their reports and dispute incorrect items.
FICO Score
FICO (Fair Isaac Credit Organization) credit score is a common tool used to determine the credit worthiness of a borrower, and the risk associated with loaning to that person. It is calculated using information from all three major credit bureaus.
FTC
The Federal Trade Commission (FTC) is the U.S. Government agency most responsible for regulating the credit reporting agencies. It is also maintains a national database of identity theft complaints, and is active in educating consumers.
I
Identity Theft
A crime in which an imposter uses the name, social security number, and/or other identifying information of a victim to open credit accounts, use existing credit accounts, or otherwise acquire benefits using the victim’s identity.
Individual Landlord (with E-Renter)
May have one or several properties, but may not have a business license or other requirements that allow them to qualify for a commercial account.
Inquiry
An inquiry is an instance in which a credit report has been requested and viewed. All inquiries are logged by the credit reporting agency. Credit grantors (such as lenders and landlords) can see which other credit grantors have inquired over the last two years. In a consumer disclosure the person can see all inquiries, including those hidden to credit grantors.
Instant Update
Instant Update is a capability for a subscriber to quickly add derogatory information to a person’s credit report, without waiting for the normal monthly update. For example, after an automobile repossession, an instant update might prevent the consumer from quickly buying another car on credit.
J
Judgments
A legal decision by a court or judge, resulting in a debt or other obligation. Often refers to the document itself which records the debt or obligation.
L
Liens
The widest use of the term includes every instance where real or personal property is charged with the payment of a debt. A more limited definition is the right to detain (or take) the property until a claim is satisfied. Liens are created through documents signed for that purpose, by order of a court or judge, or by implied contract (such as delivery of goods or services).
N
No Hit
A company’s request for credit report results in a No Hit if the person is not found in the credit repository’s database, or the identifying information was specified incorrectly.
O
OFAC/Patriot Act
OFAC (Office of Foreign Asset Control) is a department of the US Treasury. It enforces economic and trade sanctions against nations and individuals involved in terrorism, narcotics, and other disreputable activities. The Patriot Act gives federal officials increased authority in tracking and intercepting communications for the purposes of both law enforcement and foreign intelligence gathering.
On-Site Inspection
In order to receive credit reports, an on-site inspection is required of the office where the data will be stored. Each of the credit bureaus require that such an inspection be performed by an approved third party. The details of the inspection are provided by the company who will be performing the inspection, but include proper security of files and verification of the type of business being conducted at that location.
P
Paperless Verification
E-Renter’s paperless tenant consent verification process saves you time and money. Once you complete the online form to sign up for the paperless verification process , you do not need to fax or scan and email the tenant’s consent for each tenant screening order you place.
Public Record
Court judgments, foreclosures, and bankruptcies are shown in the public records part of a credit report. Companies and individuals that don’t have a relationship with a credit bureau or collection agency cannot get negative information added to a credit report, other than by getting a court judgment against a person. Credit bureaus automatically include information gathered from the courts.
R
Reseller (of Credit Reports)
A reseller is a company that provides credit reports, but does not itself, gather and store consumer credit information. For example, when a person applies to rent an apartment, the landlord might purchase a credit report from a tenant screening company (the reseller,) who gets it from Experian, Equifax, or Trans Union (the credit reporting agency.) When doing so, the reseller must indicate the end user (the landlord that requested the report) and the permissible purpose (tenant screening).
S
Security Freeze
In the event of identity theft or fraud, a security freeze is a temporary hold on a credit report, preventing new credit grantors from seeing it (until the person releases the freeze). Court orders, child support enforcement, and companies with which a person already has a credit relationship are not subjected to the freeze.
Single-Bureau Credit Report
A single-bureau credit report is a credit report from just one of the three nationwide credit reporting agencies.
T
Too New to Rate
A designation that may appear as an account status, for example, on a credit card that has been issued, but not yet used by the consumer.
Trade Line
A trade line is an item on a credit report, referring to one of the person’s past or present credit relationships. Trade lines normally include credit cards, mortgages, leases, and other loans. There will be a separate trade line for each account or credit card number, whether open or closed. (Rent and utilities are not normally listed as trade lines, unless they are in collection.)
TransUnion
Trans Union is one of the three nationwide credit reporting agencies.
U
Uniform Business Code (UCC) Filing
Uniform Business Code (UCC) filings govern commercial transactions in all 50 states. UCC filings usually represent liens between businesses and individuals, such as mortgages and financing of vehicles or equipment.
Unlawful Detainer
An Unlawful Detainer action is the correct name for the court proceeding required to evict a tenant. In order to legally terminate the tenancy, the landlord must follow the legal requirements and timing for each step. The process and the timing of each step varies according to the location of the property.
V
Vantage Score
A credit score that is computed from a credit report, based on scoring models developed by all three major credit bureaus, TransUnion, Experian, and Equifax.