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Onlinecreditrepairguide.com Glossary
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- Annual Credit Report:
- A personal credit report that can be requested for free from any one of the three consumer reporting companies within a 12 month period.
- APR or Annual Percentage Rate:
- The cost of credit calculated at a yearly rate.
- Asset:
- Any material possession or holding with monetary value. For example a house, car, stocks and bonds, or jewelry.
- Balance Transfer:
- One or more credit card balances being transferred onto another card, perhaps to take advantage of a lower APR.
- Balloon Payment:
- A final instalment payment at the end of a loan term which can be substantially larger than subsequent payments.
- Balance:
- The amount owed to a creditor.
- Consumer Reporting Companies:
- Equifax, Experian, and TransUnion are the companies required to provide one free credit report every 12 months, as requested by the consumer.
- Creditor:
- A person or company which extends financial credit to a second party.
- Credit Monitoring:
- Regularly reviewing credit reports for any suspicious or unusual activity to insure the information is correct and to protect against identity theft.
- Credit:
- Certain resources (usually financial) passing from one party to a second party with agreement that the second party will repay the incurred debt within a certain amount of time.
- Credit Rating:
- The assessment of a persons or company's credit worthiness, calculated from financial history and current assets and liabilities.
- Credit Bureau:
- A private company which collects information on consumers from public records and reports from such sources as banks and creditors.
- Credit Rating Bureau:
- A private company which collects credit information of consumers from public records and reports from banks and creditors.
- Credit Rating Agency (CRA):
- A company that assesses the quality and risks of debt securities, organizations, or companies, in order to aid an investment decision. Such rating are based on the issuers ability to service the debt and repay the principle at certain dates.
- Daily Periodic Rate:
- The Annual Percentage Rate of a credit card divided by 365 days.
- Debtor:
- A person or party owing a creditor.
- Default:
- An inability or failure to fulfill the agreed upon financial obligation, such as making regular loan payments.
- Discretionary Income:
- Money which is left over after other financial obligations and expenses are paid.
- ECOP or Equal Credit Opportunity Act:
- A Federal law requiring creditors and lenders to have credit available to all parties without discrimination of race, sex, marital status, age, religion, color, national origin, or receipt of income from public assistance programs.
- Equifax:
- One of the three consumer reporting companies required to provide one free credit report to consumers annually. Equifax is headquartered in Atlanta, GA.
- Experian:
- One of the three consumer reporting companies required to provide one free credit report to consumers annually. U.S. headquarters are in Costa Mesa, CA.
- Fair Credit Reporting Act:
- A Federal law allowing consumers access to the information consumer reporting agencies have on file about them and the ability to dispute any errors in the files.
- Finance Charge:
- The total cost of a loan, including interest, which must be paid.
- Fixed Rate:
- An interest rate which which does not change, regardless of any economic indicators.
- Foreclosure:
- The legal process by which a creditor can seize and/or sell mortgaged property to recover a defaulted mortgage.
- Garnishment:
- The process whereby a creditor can legally receive payments by seizing a portion of the debtors assets, such as wages, bank accounts etc..
- Grace Period:
- The time allotted in which any finance charges can be avoided by paying the balance in full before the due date.
- Gross Monthly Income:
- A persons earnings before taxes are withheld.
- Hard Inquiry:
- An indication on a persons credit file that a lender has received a copy of the report to evaluate the loan or credit application. A number of such inquiries within a 6 month period can adversely affect a persons credit rating.
- Home Equity:
- The current market value of a home minus the amount still owed.
- Home Equity Loan:
- Also called a second mortgage or borrowing against your home, allows the owner to borrow against the equity of the home.
- Inquiry:
- The act of a company or person accessing all or part of an individuals credit file. Inquiries remain on credit report for no more than two years.
- Installment Loan:
- An account of credit with a fixed amount, and a fixed number of payments.
- Interest Rate:
- The amount charged by a creditor or lender for borrowing money.
- Joint Account:
- A loan or credit account held by two or more people, in which all account holders have legal responsibility for repayment.
- Joint Credit Report:
- Creating a combined report by merging the credit files of joint applicants which is then used by creditors to assess a joint application for credit. This usually involves a mortgage.
- Late Payment:
- A payment received after the due date. Payments which are late by 30 day or more can be reported to credit reporting agencies and added onto the payers' credit report.
- Liability:
- Responsible by law for the repayment of a debt.
- Lien:
- A legal claim over real or personal property to be used as security for or payment of a debt.
- Line of Credit:
- The limit of credit set forth by the creditor.
- Loan-to-Value Ratio (LTV):
- The ratio of home loan amount to the appraised value of the home. Generally, the terms of a loan are more favorable with a lower LTV. Ex. The LTV is 75% when a person borrows $75,000 to buys a $100,000 house.
- Minimum Payment:
- The lowest amount of money that can be payed toward a debt in a set time frame.
- Mortgage:
- A specific loan to help with the purchase of a home. The house itself serves as security for the loan. If the required payments are not met the lender can legally foreclose the house and sell it in order to collect the remaining loan amount.
- Mortgage Debts:
- A term to include first mortgages, home equity loans, and other loans secured by real estate.
- Obsolete Information:
- Credit information which is automatically taken off of a credit report after a 7 year period. The exception is Chapter 7 bankruptcy, which comes off after 10 years.
- Opting Out:
- To limit the sharing of personal information to others, such as credit or insurance offers that were not initiated by the individual.
- Origination Fee:
- The amount charged by a lender to process a home loan.
- Periodic Rate:
- The interest rate of a loan expressed in daily or monthly terms and calculated by dividing the annual percentage rate by 365 or by 12.
- Permissible Purpose:
- A reason for a credit reporting agency to provide a consumer credit report to a third party. Credit reports cannot be provided to such third parties without a permissible purpose, as defined by Section 604 of the Fair Credit Reporting Act.
- Petition:
- If a filed bankruptcy has not yet had a judge rule for it to proceed, it is known as a bankruptcy petitioned.
- PITI:
- The acronym to describe the main components of a monthly mortgage payment- Principle, Interest, Taxes, and Insurance.
- Prime Rate:
- The interest rate banks charge on loans to the biggest and highest rated customers.
- Public Record Data:
- Information included in a credit report which is limited to tax liens, lawsuits and judgments relating to the consumer's debt obligations.
- Qualifying Ratio:
- The ratio of a persons monthly expenses to their gross monthly income. Used by creditors to evaluate loan applications.
- Quarterly:
- Every four months.
- Refinancing:
- The restructuring of a home loan to achieve a lower interest rate or to borrow money from the amount that has already been paid on a loan.
- Repossession:
- The legal process allowing a creditor to regain possession of an item sold to a consumer in the event that the agreed upon payments are not met.
- Revolving Charge Account:
- A credit account which requires at least a certain minimum payment every month, as well as a service charge on the balance. The amount owed for the service charge, or interest, will decline as the balance declines.
- Satisfied:
- A public record item is fulfilled, or satisfied, when a consumer has paid all required money.
- Second Mortgage:
- A loan taken out on a home that is already mortgaged.
- Secured Credit Card:
- A credit card which is backed, or secured by a savings account.
- Secured Loan:
- A loan which is granted when an item of property is pledged in case the loan requirements cannot be met.
- Soft Inquiry:
- A circumstance in which a credit report is accessed without affecting the credit rating.
- Tax Lien:
- The satisfying of tax related debts by placing a charge on real or personal property.
- Term:
- The allotted time in which a loan must be repaid in full.
- TransUnion:
- One of the three national credit reporting agencies. The other two are Equifax and Experian.
- Truth in Lending Act:
- A part of the Consumer Protection Act which requires lenders to disclose the annual percentage rate, total loan cost, and other terms.
- Unsecured Loan:
- A loan that is made not on a pledged collateral, but on a promise from the consumer to repay. Also called Unsecured Credit or a Signature Loan.
- Vacated:
- A judgment that has been made void or put aside is said to be vacated.
- Variable Expenses:
- Necessities which can be decreased, such as food and utilities, and non-essential expenditures that can be eliminated, for example cell phones, long distance call services, cable and subscriptions.
- Variable Interest Rate:
- An interest rate which can change in accordance with a predetermined formula based on an economic indicator like the prime rate.
- Voluntary Bankruptcy:
- When bankruptcy is filed at the request of the consumer.
- Wage-Earner Plan:
- A three to five year repayment schedule defined in a Chapter 13 bankruptcy in which the consumer is to give all disposable income to a bankruptcy trustee, who will in turn repay creditors.
- Writ of Replevin:
- The court document which authorizes the repossession of property from the debtor.