| Annual
Fees |
A
yearly fee charged by anybody for anything. |
| Annual
Percentage Rate |
The cost of credit at a yearly rate.
|
| Applicant |
A
person applying for credit privileges, employment or some other
benefit. |
| Asset |
Any
thing that has value or use. |
| Authorized
Account User |
The
person authorized by the contractually responsible party to use
the account. |
|
|
| B |
|
| Bankruptcy |
A
proceeding in U.S. Federal Court that may legally release a person
from repaying debts owed. The law contains several chapters which
relate to different methods of relief:
Chapter 7 - Straight Bankruptcy (total liquidation of assets)
Chapter 11 - Business Reorganizations
Chapter 13 - Wage Earner Repayment Plan |
| Bankruptcy
Discharged |
A
court order terminating bankruptcy proceedings on old debts. |
| Bankruptcy
Dismissed |
A
court order that denied a bankruptcy petition making the debtor
still liable for all debts. |
| Budget |
A
financial plan for saving and spending money. |
|
|
| C |
|
| Charge
Card |
A
card which requires payment in full upon receipt of the statement. |
| Charge
Off |
Accounting
term to indicate that the creditor does not expect to collect the
balance owed on an account. |
| Collection
Account |
An
account which has been transferred from a routine debt to a
Collection Department of the creditor's firm or to a separate
professional debt collecting firm. |
| Consolidation
Loan |
A
loan usually obtained for the purpose of reducing the amount of
the payments of bills owed by consolidating the bills into one
loan payment. The consumer pays off several bills with the
proceeds from one loan and is left with one consolidated monthly
payment. |
| Collateral |
Property
acceptable as security for a loan or other obligation. |
| Consumer |
Person
who uses and/or buys goods and services for family or personal
use. |
| Consumer
Credit Counseling Service |
Organizations
which help consumers find a way to repay debts through careful
budgeting and management of funds. These are usually nonprofit
organizations, funded by creditors. By requesting that creditors
accept a longer pay-off period, the counseling services can often
design a successful repayment plan. |
| Co-Signer |
Person
responsible for repaying a debt if the borrower defaults. |
| Credit |
A
trust or a promise to pay later for goods or services purchased
today. |
| Credit
Card |
A
piece of plastic used instead of cash or checks authorizing
payment for goods and services. |
| Credit
Grantor |
Person
or business furnishing consumer goods and/or services on credit. |
| Credit
History |
Record
of how a consumer has paid credit accounts in the past, used as a
guide to determine whether the consumer is likely to pay accounts
on time in the future. |
| Credit
Limit |
The
maximum amount of money which can be charged on a particular
credit account. |
| Credit
Repair Companies |
Individuals
or Companies that promise to "clean-up" or
"erase" a consumer's bad credit and give him/her a fresh
start. Also known as Credit Clinics. |
| Credit
Report |
A
record or file to a prospective lender or employer on the credit
standing of a prospective borrower, used to help determine credit
worthiness. |
| Credit
Reporting Agency |
A
company which gathers, files and sells information to creditors
and/or employers to facilitate their decisions to extend credit or
to hire. |
| Credit
Score |
A
number that is calculated to determine your credit
"worthiness". |
|
|
| D |
|
| Debit
Card |
Purchases
are deducted directly from the consumer's personal checking
account, like an ATM card. |
| Deduction |
The
amount that one is able to subtract from their income reported for
tax purposes |
|
|
| E
|
|
| Equal
Credit Opportunity Act (ECOA) |
A
federal law that requires lenders and other creditors to make
credit equally available without discrimination based on race,
color, religion, national origin, age, sex, marital status, or
receipt of income from public assistance programs. |
| Equifax |
One
of the three major credit reporting agencies, headquartered in
Atlanta, Georgia. |
| Experian |
One
of the three major credit reporting agencies, formerly known as
TRW. |
|
|
| F
|
|
| Fair
Credit Reporting Act |
A
federal law, established in 1971, and revised in 1997, which
enables consumers to learn what information Credit Reporting
Agencies have on file about them, and to dispute inaccurate data
in the file. It also establishes specific permissible purposes for
which credit reports may be requested, and places time limits on
how long adverse information may be reported. |
|
|
| G |
|
| Garnish |
Legal
process whereby a creditor has obtained judgment on a debt may
obtain full or partial payment by seizure of a portion of a
debtor's assets (wages, bank account, etc.). |
| Grace
Period |
The
period allowed to avoid any finance charges by paying off the
balance in full before the due date. |
|
|
| H
|
|
| Home
Equity Loan |
A
loan based on the difference of the amount of equity paid on a
home, and the home's current market value. |
|
|
| I
|
|
| Installment
Loan |
A
credit account in which the amount of the payment and the number
of payments are predetermined or fixed. (such as a traditional
mortgage) |
| Interest |
The
cost of borrowing or lending money, usually a percentage of the
amount borrowed or loaned. |
|
|
| J |
|
| Judgment |
The
official court decision of an action or suit. This public record
may be listed on a credit report in matters of money and debts
owed. |
|
|
| L |
|
| Lease |
A
written document containing the conditions under which the
possession and use of real and/or personal property are given by
the owner to another for a stated period and for a stated
consideration. |
| Lien |
A
legal hold or claim of one person on the property of another as
security for a debt or charge. The right given by law to satisfy
debt. (A lien must be paid and released). |
|
|
| M
|
|
| Mortgage |
A
lien or claim against real property given by the buyer to the
lender as security for money borrowed.1st Mortgage-Also known as
the "primary" mortgage-has priority over the claims of
subsequent lenders for the same property.2nd Mortgage-Also know as
the "secondary" mortgage-is a loan secured by mortgage
or trust deed, which lien is "junior" to another
mortgage or trust. |
|
|
| P |
|
| Permissible
Purposes |
As
defined in section 604 of the Fair Credit Reporting Act, only the
named reasons for requesting a credit report are deemed
"permissible". Requests not meeting these criteria must
be denied. |
| Personal
Line of Credit |
The
maximum amount one can owe at any time, based on income, debt and
credit history. |
| Personal
Loan |
A
loan based on a consumer's income, debt and credit history. |
| Principal |
The
outstanding balance of a loan, exclusive of interest and other
charges. |
| Public
Record |
Information
obtained by the Credit Reporting Agency from court records, such
as liens, bankruptcy filings and judgments. Public records are
open to any person who requests them. |
|
|
R
|
|
| Repossession |
Forced,
or voluntary surrender of merchandise as a result of the
customer's failure to pay as promised. There are several types and
descriptions of repossession actions. |
| Revolving
Account |
An
account which requires at least a specified minimum payment each
month plus a service charge on the balance. As the balance
declines, the amount of the service charge, or interest, also
declines. |
|
|
| S
|
|
| Secured
Credit Card |
A
credit card secured by a savings account that has been established
in advance by the borrower. The amount in the account usually
determines the limit on the credit card. These accounts present no
real risk factor for creditors and are therefore much easier to
obtain. |
|
|
| T |
|
| Trans
Union |
One
of the three major Credit Reporting Agencies. |
|
|
