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| Annual Percentage Rate (APR) |
The cost of credit at a yearly rate. |
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| Applicant |
A person applying for credit privileges, employment or some other benefit. |
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| Asset |
Any thing you own that has value or use. |
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| 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 |
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| Bankruptcy Discharged |
A court order terminating bankruptcy proceedings on old debts. |
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| Budget |
A financial plan for both saving & spending money. |
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| Collection Account |
Refers to the status of an account owed to a creditor when it has been transferred from a routine debt to a Collection Department of the creditor's firm or to a separate professional debt collecting firm. |
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| Consolidation Loan |
A loan usually obtained for the purpose of reducing the amount of the payments of bills owing 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. |
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| Collateral |
Property acceptable as security for a loan or other obligation. |
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| Consumer |
Person who uses and/or buys goods and services for family or personal use. |
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| Co-Signer |
Person responsible for repaying a debt if the borrower defaults. |
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| Credit |
A trust or a promise to pay later for goods or services purchased today. |
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| Credit Card |
A rectangular piece of plastic used instead of cash or checks authorizing payment for goods and services. |
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| Credit Grantor |
Person or business furnishing consumer goods and/or services on credit. |
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| 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. |
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| Credit Limit |
The maximum amount of money you can charge on a particular credit account. |
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| Credit Repair Companies |
Individuals or Companies that promise to "clean-up" or "erase" your bad credit and give you a fresh start. Also know as Credit Clinics. |
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| 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. |
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| 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. |
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| Debit Card |
Purchases are deducted directly from the consumer's personal checking account. |
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| 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. |
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| Equifax |
One of the three major credit reporting agencies, headquartered in Atlanta, Georgia. |
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| Experian |
One of the three major credit reporting agencies, formerly known as TRW. |
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| 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. |
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| Grace Period |
The period allowed to avoid any finance charges by paying off the balance in full before the due date. |
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| Interest |
The cost of borrowing or lending money, usually a percentage of the amount borrowed or loaned. |
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| 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. |
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| 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). |
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| Personal Line of Credit |
The maximum amount you can owe at any time, based on your income, debt and your credit history. |
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| Personal Loan |
A loan based on your income, debt and credit history. |
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| Principal |
The outstanding balance of a loan, exclusive of interest and other charges. |
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| 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 to see them. |
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| 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. |
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| Secured Credit Card |
A credit card secured by a savings account that has been established in advance by the borrower. |
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| Trans Union |
One of the three major Credit Reporting Agencies. |
