Having good credit is important in achieving your financial goals. For that reason we have put together six very important terms that is important when learning about your credit. 1. Credit Report : Document that shows your debt and payment history; 2. Credit Bureau: Organization that holds your credit report; 3. Credit Score: A calculated number that shows how you pay back your debt. It also shows your payment history, length of credit, your abilty to pay back. The higher the number the better score you have; 4. Hard Inquiry: When a lender pulls your credit report; 5. Soft Inquiry: When anyone other than a lender checks your credit report; 6. Debt-to-income ratio: The amount of money you owe compared to how much income you have. These terms will be very helpful when trying to undetstand your credit.
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LearnVest Vocab Lesson: 6 Credit Definitions You Need to Know