Confusing Credit Terminology, Demystified

Credit Info, How To

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What’s the difference between a credit report and a credit file?  Is there a difference between a credit score and a FICO score?  And what’s a consumer-reporting agency?  Is that the same as a credit-reporting agency?

Many media outlets and people who pretend to be credit experts have made a living off of improperly using credit terms interchangeably.  By far the most prevalent example is the confusion between the terms “credit report” and “credit score”, especially when it comes to their use in employment screening.  Here’s a hint: credit reports are not credit scores and credit scores are not credit reports.

Here are seven pairs of seemingly interchangeable credit terms that are most often misinterpreted by consumers and even “experts.”

Credit Report vs Credit Score

A credit report is a collection of information memorializing most of your financial liabilities.  This includes your auto loans, mortgages, credit cards, student loans, collections, judgments, liens and bankruptcies.  A credit score, which is not a permanent part of your credit report, is the interpretation of that data on your credit report.  Think of it this way: one is the test and the other is your grade on the test.  They’re two very different things.

Credit Report vs Credit File

A credit report is a fully compiled list of information that matches your identity and is maintained by a credit reporting agency.  Think of it as a final product, which is scored and delivered to lenders and anyone else who has a right to see and use it.  A credit file is the “universe” of information floating around the credit bureau’s databases waiting to be compiled into credit reports.

Credit Reporting Agency vs Consumer Reporting Agency

“Consumer reporting agency” is a legal term.  It means any organization that regularly compiles information about a consumer for the purposes of selling it to a 3rd party.  A credit reporting agency is an example of a consumer reporting agency, but isn’t the only type of consumer reporting agency.  I wrote about LexisNexis, another consumer reporting agency, here.

Credit Score vs FICO Score

A credit score is a category of products.  It’s like saying cars, beer, shoes, or soft drinks.  FICO is a brand of credit score.  It’s like saying Ford, Budweiser, Nike, or Fresca.  If it doesn’t say “FICO,” then you’re not getting a FICO score.  Simple enough.

Home Equity Loan vs Home Equity Line

Despite the similar names these are actually two very different credit product types.  A home equity loan is an installment loan, meaning you have a fixed payment for a fixed number of months.  A home equity line is a revolving line of credit, just like a credit card.  Your payment is dependent on the interest rate and your balance for that month (like a credit card).  The only similarity between the two is the fact that the loan/line is secured by equity in your home, which means if you default on your payment obligation you could lose your house.

Credit Card vs Charge Card

Again, very similar names but very different credit products.  A credit card is a revolving account, which means you have a variable payment depending on your outstanding balance for the month.  It’s a perpetual account as long as you and the credit card issuer agree to keep it open.  This means it could be open indefinitely.  A charge card is a “pay in full” credit product, which means you can’t “roll” a balance from one month to the next.  If your balance is $300 you have to pay $300 to exhaust the full balance.  The American Express Green Card is a good example of a charge card.

Chapter 7 vs Chapter 13

These are both types of consumer bankruptcies under the U.S Code.  A Chapter 7 bankruptcy is referred to as a “straight bankruptcy” or “liquidation.”  Under Chapter 7 any statutorily dischargeable debt is eliminated.  A Chapter 13 is referred to as an “adjustment of debt” or a “wage earner plan.”  Under Chapter 13 the consumer, who has an income, pays into a trustee who then distributes the money to the consumer’s creditors.

John Ulzheimer is the President of Consumer Education at, the credit blogger for, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and, John is the only recognized credit expert who actually comes from the credit industry. The opinions expressed in his articles are his and not of or Intuit.

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