BUILDING CREDIT
What is a secured credit card?
A credit card backed by a refundable deposit used to rebuild credit
How long does a credit bureau have to investigate a dispute?
30 days-45 days
What is a charge-off?
An account a creditor moved to loss status after prolonged delinquency (usually about 180 days)
What is the largest factor affecting your credit score?
Payment history
The law that gives consumers the right to dispute inaccurate credit reporting.
The Fair Credit Reporting Act (FCRA)
What is an authorized user?
Being added to another person’s established account to gain history
What is a frivolous or repetitive dispute?
Sending the same dispute repeatedly without new information
What is dual reporting?
When both the original creditor and the collection agency report the same debt
What utilization percentage is recommended for best scoring?
Under 30% (ideal: under 10%)
How many credit bureaus are there in the United States?
Three (Experian, Equifax, TransUnion)
What does credit mix refer to?
Having different types of accounts (revolving and installment)
What is e-OSCAR?
The electronic system used by furnishers and bureaus to verify accounts
What does paying a charge-off remove?
The balance but not the negative payment history
What type of account typically builds credit fastest after repair?
Revolving accounts
(Revolving accounts impact scores the most because utilization updates monthly, not necessarily “fastest.”)
How long can most negative items remain on a credit report?
Generally 7 years from the Date of First Delinquency, although some items differ (for example, bankruptcies or inquiries)
Why can closing your only credit card hurt your score?
It increases utilization and removes available credit
What is a failure to verify deletion?
When an account is removed because the creditor didn’t verify in time
What is the statute of limitations?
The legal time period a creditor has to sue for the debt
What happens to your score immediately after paying a collection?
Usually little to no immediate increase
What date determines when a derogatory account must be removed?
The Date of First Delinquency (DOFD)
How many revolving accounts are ideal for a strong profile?
About 3–5 credit cards
What is a direct dispute?
Challenging reporting accuracy directly with the data furnisher
What must a collector provide after a validation request?
Proof the debt is accurate and they have authority to collect
How are multiple mortgage or auto inquiries treated when done within a short time?
They count as one inquiry for scoring purposes
What is a hard inquiry?
A credit check generated when a lender reviews your credit for a loan application