📘 Credit & Finance Terms Made Simple

Confused by financial jargon?
Here’s a simple glossary of credit and personal finance terms — no fluff, just clear explanations.

🔍 FICO Score

Your FICO score is a credit rating from 300 to 850.
The higher it is, the better lenders trust you. Think of it as your financial reputation.

📅 Payment History

This is your track record of paying on time.
It makes up 35% of your credit score — it’s the most important factor.

💳 Credit Utilization

How much of your available credit you’re using.
Example: if you have a $1,000 limit and owe $500, that’s 50% utilization.

📈 APR (Annual Percentage Rate)

The annual interest rate you pay on loans or credit cards.
Lower APR = less interest paid.

🔐 Secured Credit Card

A credit card backed by a deposit.
Great for building or repairing credit when you’re just starting out.

⚠️ Hard Inquiry

When a lender checks your credit to approve you for a loan or card.
Each hard inquiry can drop your score a few points, especially if you have many.

📂 Revolving Credit

A type of credit that refreshes as you pay it down.
Example: credit cards.

🧾 Collections

When you don’t pay a debt and it gets sent to a collections agency.
This hurts your score and stays on your report for up to 7 years.

🔁 Debt Consolidation

Combining multiple debts into one loan — usually to lower your interest rate and stay organized.

🏁 Average Scores to Get Approved

• Mortgage: 620 minimum, 680+ recommended

• Car loan: 580+ gets approved, but high interest

• 750+ = best interest rates and terms

🛠 Confused by your credit report?
Message us the word “GLOSSARY” and we’ll help break it down for you.
📲 You don’t have to figure it out alone — we got you.