| Annual
Fees |
A
yearly fee charged by credit grantors for the privilege
of using a credit card. |
| 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 you own 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 12 - Farm Debt Bankruptcy
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
rectangular 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. |
|
|
| D |
|
|
Debit
Card |
Purchases
are deducted directly from the consumer's personal checking
account. |
|
|
| 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 |
|
| Garnishment |
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. |
| 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. |
| Smart
Card |
An
electronic prepaid cash card, usually sold at banks and
exchanged at face value. |
|
|
| T
|
|
| Trans
Union |
One
of the three major Credit Reporting Agencies. |
|
|
|
|
