Credit reports use jargon that feels like a foreign language. You do not need a law degree to understand them. These six terms appear often. Knowing what they mean helps you act fast.
Charge-Off
A charge-off happens when a lender gives up collecting a debt. They write it off as a loss. You still owe the money. The debt does not disappear. It may be sold to a collection agency. This is a serious negative mark. It signals high risk to future lenders.
- What to do: Pay the debt if you can. Ask for a “paid in full” letter. This does not remove the charge-off, but it shows you resolved it.
Closed by Credit Grantor
This status means the company closed the account. You did not ask for it. This is common with credit cards. It can happen if you stop using the card. It can also happen if the issuer pulls out of a market. Your credit limit drops to zero.
- What to do: Check the reason. If you want the card, call the issuer. Say, “I would like to reopen this account.” They may say no. That is fine. Just know why it closed.
Derogatory Mark
This is a broad term for any bad info on your report. It includes late payments, repossessions, and bankruptcies. Lenders see these as risk flags. They look at how recent the mark is. Older marks matter less. The impact fades over time.
- What to do: Verify the accuracy. If the date or amount is wrong, dispute it. Accurate marks stay until they age off. You cannot force a removal of a valid negative item.
Revolving vs. Installment
Revolving credit has a limit that resets. Credit cards are the main example. You pay a balance, then use it again. Installment credit is a fixed loan. You pay it off over time. Mortgages and auto loans are examples.
- What to do: Keep a mix of both. Lenders like to see you handle different types of debt. Do not open new accounts just to change your mix. Let your history build naturally.
Past Due
This means you missed a payment. The report shows how late you were. A single day late is usually not reported. A delay of several weeks is a common threshold. This hurts your score significantly. It shows a pattern of risk.
- What to do: If you see a late payment you know is wrong, dispute it. If it is real, pay it off. Set up auto-pay to prevent future issues. This is the fastest way to stop new damage.
Account in Dispute
This note appears when you challenge an item. It does not mean the item is wrong. It just means you are asking for a check. The investigation usually takes a short time. You should keep records of all correspondence.
- What to do: Keep records of your dispute. Send letters with proof. If the bureau confirms the error, it is fixed. If not, the dispute note disappears, and the original item stays.
