Glossary of Terms
Definitions of legal and credit terms you'll encounter when dealing with identity theft and credit disputes.
A
Actual Damages
Real, measurable losses you suffered due to identity theft or credit reporting errors. This can include lost wages, higher interest rates, out-of-pocket expenses, and compensation for emotional distress like anxiety, embarrassment, and lost sleep.
Adverse Action
A negative decision based on your credit report, such as being denied credit, employment, insurance, or housing. When you receive an adverse action, the company must tell you which credit bureau's report they used, and you can get a free copy of that report.
Annual Credit Report
You're entitled to one free credit report from each of the three major bureaus (Equifax, Experian, TransUnion) every 12 months through AnnualCreditReport.com. This is the only federally authorized source for free annual reports.
Arbitration Clause
A contract provision that requires disputes to be resolved through private arbitration instead of court. Many credit card and financial agreements include these clauses, which can limit your legal options. Be cautious about signing agreements with mandatory arbitration.
Learn more: Arbitration WarningB
Block (Identity Theft Block)
Under the FCRA, when you submit an Identity Theft Report, you can request that the credit bureaus 'block' fraudulent information from appearing on your report. Once blocked, the information should not reappear.
C
Certified Mail
A postal service that provides proof of mailing and delivery. Always send dispute letters via certified mail with return receipt requested. This creates evidence that the recipient received your letter and when.
Charge-Off
When a creditor writes off a debt as uncollectible, usually after 180 days of non-payment. The debt doesn't disappear—it's often sold to a debt collector. Fraudulent charge-offs can severely damage your credit score.
Consumer Financial Protection Bureau (CFPB)
A federal agency that oversees consumer financial products and services, including credit reporting. You can file complaints against credit bureaus and furnishers with the CFPB at consumerfinance.gov.
Learn more: Federal ResourcesConsumer Reporting Agency (CRA)
Any company that collects and sells consumer information. The 'Big Three' CRAs are Equifax, Experian, and TransUnion, but there are also specialty CRAs that track rental history, medical information, employment, and more.
Learn more: The CRAsCredit Freeze (Security Freeze)
A tool that restricts access to your credit report, preventing new accounts from being opened in your name. Freezes are free to place and lift. Unlike fraud alerts, a freeze actually blocks access rather than just flagging your file.
Learn more: Protect YourselfCredit Score
A numerical representation of your creditworthiness, typically ranging from 300-850. FICO and VantageScore are the main scoring models. Identity theft can dramatically lower your score by adding fraudulent accounts, missed payments, and high balances.
D
Debt Collector
A company that collects debts owed to other creditors. Debt collectors are regulated by the Fair Debt Collection Practices Act (FDCPA). If they're collecting a fraudulent debt, send them a written dispute with your Identity Theft Report.
Dispute
A formal challenge to information on your credit report. Under the FCRA, credit bureaus must investigate disputes within 30-45 days. Always dispute in writing via certified mail, not online.
Learn more: Dispute GuideE
Equifax
One of the three major credit bureaus. Equifax was responsible for the massive 2017 data breach affecting 147 million consumers. To dispute: Equifax Information Services LLC, P.O. Box 740256, Atlanta, GA 30374.
Experian
One of the three major credit bureaus. To dispute: Experian, P.O. Box 4500, Allen, TX 75013. Experian is known for being particularly difficult in the dispute process.
Extended Fraud Alert
A fraud alert that stays on your credit report for 7 years (vs. 1 year for initial alerts). Available to identity theft victims who provide an Identity Theft Report. Creditors must contact you before opening new accounts.
F
Fair Credit Reporting Act (FCRA)
The federal law that governs credit reporting. It gives you the right to dispute errors, requires reasonable investigations, and provides for damages when bureaus or furnishers violate the law. Found at 15 U.S.C. § 1681.
Learn more: Your RightsFair Debt Collection Practices Act (FDCPA)
A federal law that prohibits abusive debt collection practices. If a debt collector is pursuing you for a fraudulent debt, the FDCPA gives you rights to dispute and stop collection.
Fraud Alert
A free notice placed on your credit file that asks creditors to verify your identity before opening new accounts. Initial alerts last 1 year; extended alerts (for ID theft victims with a report) last 7 years.
FTC Identity Theft Affidavit
A sworn statement about identity theft that you file with the Federal Trade Commission at IdentityTheft.gov. Combined with a police report, it forms an Identity Theft Report that gives you enhanced rights under the FCRA.
Furnisher
Any company that reports information to credit bureaus—banks, credit card companies, lenders, debt collectors, landlords, etc. Furnishers have their own FCRA obligations to investigate disputes and report accurate information.
Learn more: The FurnishersH
Hard Inquiry
A credit check that occurs when you apply for credit, which can slightly lower your score. Fraudulent hard inquiries from accounts you didn't apply for should be disputed. Too many inquiries can be a red flag for identity theft.
I
Identity Theft Report
A combination of an FTC Identity Theft Affidavit and a police report. This document unlocks additional rights under the FCRA, including the ability to block fraudulent information and get copies of fraudulent applications.
M
Mixed File
When a credit bureau combines information from two different people into one report, often due to similar names, addresses, or SSN typos. This is a common source of credit report errors and is a bureau failure.
N
Negligence
Under the FCRA, failing to follow reasonable procedures. If a credit bureau or furnisher negligently violates the FCRA, you can recover actual damages plus attorney fees. This is an easier standard to prove than willfulness.
P
Police Report
An official report filed with law enforcement documenting the identity theft. Essential for creating an Identity Theft Report. File even if police say they can't investigate—you need the report number, not an arrest.
Punitive Damages
Additional damages awarded to punish particularly bad behavior. Under the FCRA, punitive damages are available for willful violations and can be substantial, especially in cases where bureaus or furnishers ignored clear evidence of fraud.
R
Reasonable Investigation
What the FCRA requires credit bureaus and furnishers to conduct when you dispute. Courts have found that simply parroting back the furnisher's response, without independent review, is not 'reasonable.'
Reinsertion
When previously deleted information reappears on your credit report. The FCRA has specific rules about reinsertion—bureaus must notify you within 5 days and certify the accuracy. Reinsertion violations can support a lawsuit.
S
Soft Inquiry
A credit check that doesn't affect your score, such as when you check your own credit, when companies send pre-approved offers, or when existing creditors review your account.
Statute of Limitations
The deadline for filing a lawsuit. For FCRA claims, you must file within 2 years of discovering the violation OR 5 years after the violation occurred, whichever is earlier. Each new report of false information can restart this clock.
Statutory Damages
Under the FCRA, damages of $100-$1,000 per willful violation, available even without proving actual harm. These are in addition to actual damages and can make smaller cases viable to pursue.
Synthetic Identity Theft
A type of fraud where criminals combine real information (often a stolen SSN) with fabricated details to create a new 'synthetic' identity. Harder to detect than traditional identity theft.
Learn more: Synthetic ID TheftT
TransUnion
One of the three major credit bureaus. To dispute: TransUnion Consumer Solutions, P.O. Box 2000, Chester, PA 19016.
W
Willful Violation
A knowing or reckless violation of the FCRA. Willful violations allow for statutory damages ($100-$1,000), punitive damages, and attorney fees. Courts have found that ignoring clear evidence of fraud can be willful.
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