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For most people, credit reports are quite a mystery and are hard to understand. But regular checking of your credit report will help you to keep the information accurate and available when you need to pull your credit report to obtain credit. This sampling of credit report related terms are pulled from the Glossary of Finance Terms available on RateNerd.com.

Credit Limit/Line of Credit: In open-end credit, the maximum amount a borrower can draw upon or the maximum that an account can show as outstanding, and is shown on a credit report.

Credit items: Information reported by current or past creditors on a credit report.

Credit Report: A report documenting the credit history and current status of a borrower's credit standing. This confidential credit report on a consumer's payment habits as reported by their creditors to a consumer credit reporting agency. The agency provides the information to credit grantors who have a permissible purpose under the law to review the credit report.

Credit reports may be viewed by companies issuing credit (credit cards, auto loans, mortgages and so on), and many others including prospective employers, land lords, insurance companies, utility companies and more.

It is vital for consumers to check their credit report regularly and to correct any errors.

Credit Score: A credit risk score is a statistical summary of the information contained in a consumer's credit report. The most well known type of credit risk score is the Fair Isaac or FICO score. This form of credit scoring is a mathematical summary calculation that assigns numerical values to various pieces of information in the credit report. The overall credit risk score is highly relative in the credit underwriting process for a mortgage loan. Another popular score is the Beacon score.

Credit Scoring: Tool used by credit grantors to provide an objective means of determining risks in granting credit. Credit scoring increases efficiency and timely response in the credit granting process. Credit scoring criteria is set by the credit grantor.

Creditworthiness: The ability of a consumer to receive favorable consideration and approval for the use of credit from an establishment to which they applied, mainly determined by the credit score and credit report.

Fair Credit Reporting Act (FCRA): A consumer protection law that regulates the disclosure of consumer credit reports by consumer/credit reporting agencies and establishes procedures for correcting mistakes on one's credit report.

Identity theft (ID Theft): Identity theft is a crime in which an imposter obtains key pieces of personal information, such as Social Security or driver's license numbers, in order to impersonate someone else. The information can be used to obtain credit, merchandise, and services in the name of the victim, or to provide the thief with false credentials.

Identity theft has become rampant over the past decade, and is difficult to repair. Unfortunately, the victim is generally treated as guilty until proven innocent. Identity theft can be thwarted by careful retention of records and one of several services which monitor for suspicions activity on their credit report.

Credit reports, credit scores and credit histories are important to maintain if you want to obtain credit. Check the resources at RateNerd.com for more information.