Let’s be honest—credit reports can be confusing. They contain loads of information about your credit history, and sometimes the data may appear incomplete or out of context. And if you miss something important, it may negatively impact your credit without you realizing it.

In order to fully understand the info in your credit report, here are a few key terms you should know:

Charged off

Despite how it may sound, “charged off” does not refer to forgiven debt. It’s a term used by creditors when they give up trying to collect on money that you owe. However, rather than dismissing it, they send it to a collection agency. Make no mistake—you still owe money until the debt is paid, settled, or discharged in bankruptcy.

A charge off can remain on your credit report for up to seven years, so try to pay the debt before it reaches this point.

Soft vs. hard inquiry

When a creditor or individual checks your credit report, this is known as an inquiry. They want to determine your creditworthiness, and decide if they can give you a loan, rent you an apartment, etc. But not all inquiries are created equal.

Hard inquiries occur when a lender checks your credit report to approve your loan. It may slightly lower your credit score, and can stay on your report for up to two years. Soft inquiries, on the other hand, are more like background checks. Landlords, employers, and mortgage lenders checking your preapproval status—those are soft inquiries. Fortunately, they don’t affect your credit.

Revolving debt

Revolving debt is the kind of debt associated with credit cards. You don’t need to reapply for more credit when you need it; you simply just use your card (as long as it’s not maxed out, of course).

Make a payment of $300? That credit becomes available to you again on the card. The key to keeping your revolving debt in check is discipline. In other words, make sure you pay off your card every month!