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A quick guide to credit report terms

By Allstate Identity Protection

Your credit report is the key to your credit standing: a resource you should check regularly for accurate information, as well as evidence of identity theft. But the lingo in these reports can make them difficult to understand. In this guide, you’ll find definitions of important credit terms, plus details on what each one means for your credit score. 

Reviewing your credit report is critical for spotting identity theft—and maintaining healthy credit all-around.

However, this record of your credit activity can be confusing, stacked with different numbers and peppered with unfamiliar terms. And it can also look different depending on how you accessed your report and from which bureau: Equifax, Experian, or TransUnion.

To help you decode your personal credit report, we’ve put together a guide to important terms you may see included, with explanations about how each one impacts your score.

Key terms to understand in your credit report

Familiarizing yourself with the terms in your credit report is essential for assessing your financial health and spotting potential issues.

If something doesn’t look right—like accounts you don’t recognize, incorrect balances, or late payments you know you made on time—you’ll need to dispute it with the credit bureau quickly to prevent further complications.  

  • Account status: This indicates whether the account is open or closed, as well as its payment situation (as of the last update provided by the lender or creditor). A status might read “open / never late,” for example, or “account included in bankruptcy.” While on-time payments boost your score and late ones bring it down, your overall mix of accounts has an impact, too. It can benefit you to have a diverse array of active credit cards, mortgages, car loans, and retail accounts. However, you should be using a relatively low amount of the credit that’s available to you. 

  • Adverse accounts (or potentially negative accounts): These accounts are any that you haven’t paid in a timely manner or that have fallen into collections. Some reports label these accounts as “delinquent,” or if they’re more than 180 days past due, “derogatory.”  Adverse accounts can do serious damage to your score. They stay on your report for up to seven years.  

  • Inquiries: Inquiries are requests to review your credit file. Listed on your report for 24 months, they fall into two categories: hard inquiries or soft inquiries. 

  • Hard inquiries appear when you apply for credit and the lender or creditor pulls your file to determine your creditworthiness. Some reports categorize these as “regular inquiries.” Credit scoring models consider how often and how recently you’ve applied for credit, so hard inquiries can put a small dent in your score—fewer than five points per inquiry. Though listed on your report for two years, they’re usually only factored into your score for one. 

  • Soft inquiries happen when a check is conducted, but not because you’re seeking new credit. For example, you might have checked your own report, or a potential employer did. These may be categorized as “account review inquiries.” Companies can also access a limited amount of information on your file in order to offer you products such as insurance; you may see these called “promotional inquiries.” Soft inquiries do not change your score in any way.  

  • Public records: This section lists any bankruptcies filed in your name within the last seven to 10 years (depending on the type of bankruptcy). Bankruptcies can take up to 200 points off your credit score and make it tough to get any new loans. Their impact diminishes as time passes, and you can boost your score through good habits.  

  • Satisfactory accounts: These are accounts that have been paid on time and are “in good standing.” Accounts closed within the last 10 years are included alongside current ones. Sticking to the payment schedule for all your accounts helps you rack up a strong score.  

Pro Tips

You know them as credit cards and car loans, but your credit report may call them:

  • Revolving accounts: Those with a maximum credit limit, such as a credit card. The balance can carry over from month to month, and each required minimum payment depends upon the outstanding balance. 

  • Lines of credit: A type of revolving credit that allows the consumer to withdraw only the amount they need. The borrower pays interest on the amount they’ve drawn.

  • Installment accounts: Debts such as mortgages and student loans that must be paid on certain dates within a specified period of time. 

How to monitor your credit report  

Your credit report is more than a document—it’s a snapshot of your financial life. Understanding these key terms and their implications is the first step toward managing your credit responsibly and protecting your identity.

Select Allstate Identity Protection plans include credit monitoring, which can help you decode your personal credit report and spot potential issues early. If you’re a member, don’t hesitate to reach out—we’re here to guide you in making the best decisions for your situation.

Additionally, you can access your credit report for free at annualcreditreport.com

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