Glossary of Terms

Below is a list of common terminology and abbreviations I may use from time to time when making blog updates, and that you may find when reading other financial blogs or forums. It can get a bit confusing, so I’ve made this glossary so you can cross-reference anything you don’t know. If I use any terminology that isn’t listed here and you don’t know, don’t hesitate to contact me and I’ll let you know (and update this glossary).

AOR: An App-O-Ramma, or AOR, involves applying for a large number of credit cards at the same time to benefit from inquiries not showing up on your report. This will maximize the likelihood of getting approved for new lines of credit.

APR: Annual Percentage Rate refers to an interest rate, often in reference to loans and credit cards. This rate is added on to the principal amount you owe.

APY: Annual Percentage Yield is very similar to APR but takes compounding into effect.

BT: Balance Transfers, most commonly used for profit in an AOR, are the process of transferring a portion of a balance to a different source – another credit card (with lower payments, it can be a great way to defer paying interest) or bank account, for example.

CD: A Certificate of Deposit is similar to a savings account. It earns interest on money you put in. The main difference is that your money is locked in at a certain rate (often higher than normal savings account rates) for a specific time-period, ranging anywhere from three months to multiple years.

CL: Credit limit is the amount of credit (money that has to be paid back) a card issuer is willing to let you use.

Compounding: Compounding refers to adding interest to a principal value. By adding the interest earned to a principal value, the principal in effect increases and when the interest is calculated again it will be higher.

CR: Your credit report includes information about your credit history and is used by lenders to determine the risk involved in offering you credit or loans.

CS: Credit scores are a numerical value of the risk involved in offering you credit or loans. Credit sores range from 300 to 850.

EQ: Equifax is one of the three major credit reporting agencies.

EX: Experian is one of the three major credit reporting agencies.

FAKO: Fake FICO scores, often based on rough estimates.

FICO: Fair Isaac & Corporation – the system used to determine your credit score.

Hard Inquiry: An inquiry on your credit report most likely made by a lender when applying for a loan. Hard inquiries may lower your credit score.

HHI: Household income refers to the net income in a household.

HYSA: A high-yield savings account typically pays a fairly high interest rate; most of the time over 4.5%, sometimes ranging up to 6%.

IRA: An Individual Retirement Account is essentially a special savings account with various tax benefits depending on which type of account it is. The most common account types are the Roth IRA and the Traditional IRA. More information can be found on the IRA page.

Soft Inquiry: Any other inquiry on your credit report. These can be made by you, the reporting agencies, or a company that has paid for rights to your credit report. Soft inquiries do not affect your credit score.

TU: TransUnion is one of the three major credit reporting agencies.

YMMV: Your mileage may vary – used when you may have different results trying something (doing an AOR is a good example).