Common Credit Related Terms Definitions

1. Common Credit-Related TERMS & DEFINITIONS Credit reporting companies, also known as “credit bureaus” or “consumer reporting agencies” are companies that compile and sell credit reports. CREDIT REPORTING COMPANY A credit report is a statement that has information about your credit activity and current credit situation such as loan paying history and the status of your credit accounts. CREDIT REPORT A credit score predicts how likely you are to pay back a loan on time. Companies use a mathematical formula—called a scoring model—to create your credit score from the information in your credit report. It is important to know that you do not have just “one” credit score and there are many credit scores available to you as well as to lenders. Any credit score depends on the data used to calculate it, and may differ depending on the scoring model, the source of your credit history, the type of loan product, and even the day when it was calculated. CREDIT SCORE The federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. There are many types of consumer reporting agencies including credit bureaus and specialty agencies (such as agencies that sell information about check writing histories, medical records, and rental history records). Learn more about your major rights under the FCRA. FAIR CREDIT REPORTING ACT A fraud alert requires creditors who check your credit report to take steps to verify your identity before opening a new account, issuing an additional card, or increasing the credit limit on an existing account based on a consumer’s request. When you place a fraud alert on your credit report at one of the nationwide credit reporting companies, it must notify the others. There are two main types of fraud alerts: initial fraud alerts and extended alerts. FRAUD ALERT Identity theft occurs when someone steals your identity to commit fraud. Stealing your identity could mean using personal information without your permission such as: IDENTITY THEFT • Your name • Social Security number • Credit card number Members of the military (such as members of the Marines, Army, Navy, Air Force, and Coast Guard) can request an active duty alert. When you place an active duty alert on your credit report, creditors must take reasonable steps to make sure the person making the request is actually you before opening an account, issuing an additional credit card on an existing account, or increasing the credit limit on your existing account. Active duty alerts last for 12 months. Your name also will be removed from the nationwide credit reporting companies’ pre-screen marketing lists for credit offers and insurance for two years. MILITARY ACTIVE DUTY ALERT A “security freeze” on your credit report prevents new creditors from accessing your credit file and others from opening accounts in your name until you lift the freeze. Because most businesses will not open credit accounts without checking your credit report, a freeze can stop identity thieves from opening new accounts in your name. SECURITY FREEZE SPECIALTY CONSUMER REPORTING COMPANY Specialty consumer reporting companies collect and share information about your employment history, transaction history with a business or repayment history for a specific product or service. A thin credit file or no credit file means that a person does not have a credit history or not enough current credit history to produce a credit score. See: Credit invisible. THIN CREDIT FILE/NO CREDIT FILE Copyright©2018 Fairway Independent Mortgage Corporation. NMLS#2289. (www.nmlsconsumeraccess.org) 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all dollar amounts. Other restrictions and limitations may apply. Fairway is not affiliated with any government agencies. Fairway is required to disclose the follow- ing license information. AZ License #BK-0904162; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, License No 41DBO-78367. Licensed by the Department of Business Oversight under the California Finance Lenders Law, NMLS #2289. Loans made or arranged pursuant to a California Residential Mortgage Lending Act License.; Georgia Residential Mortgage Licensee #21158; Illinois Residential Mort- gage Licensee; MA Mortgage Broker and Lender License #MC2289; Licensed Nevada Mortgage Lender; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker-NYS Department of Financial Services; Rhode Island Licensed Broker & Lender; TX Location: 1800 Golden Trail, Carrollton, TX 75010.