Debt Consolidation Depot
Debt Consolidation & Financial Information Resource Center
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
AAccount Review A consumer's credit history is reviewed by a creditor Annual Fee A yearly fee the lender charges to maintain an account Annual Percentage Rate (APR) Yearly rate of the cost of credit. Comparison of loans can be done effectively with knowledge of the APR, even when the loans are structured differently. Asset Any possession or holding that has a monetary value or use. Jewelry, real estate, cars, and stocks and bonds are regarded as assets. B Bankruptcy Two types apply to consumers: Chapter 7: one's unprotected assets are sold and disbursed to pay creditors in a court proceeding
Chapter 13: an extended time is allowed to the debtor to repay all or part of his/her debts. The debtor is permitted to keep his assets.
The court orders foreclosures, garnishments, repossessions, utility cut-offs and debt collection activities to cease once a bankruptcy has been filed.
C Collateral Acceptable assets used as security for a loan or other obligation Consumer Debt Debt incurred by items that are not considered tangible investments. Examples would be car loans, credit car debt, or personal loans made by family members. Consumer Credit Counseling Service (CCCS) Usually non-profit organizations that funded by creditors. They assist consumers with ways to repay debt by helping them manage funds and budgeting their finances. CCCS will many times formulate a workable repayment plan on behalf of the consumer by requesting a longer pay-off period from creditors one-by-one. *Credit A trust or promise to buy now and pay later under designated terms for goods or services Credit Bureau/Credit Reporting Agency Credit Bureau/Credit Reporting Agency Credit Fraud/Identity Theft A criminal offense involving using another's personal information such as their name or Social Security, etc. in order to acquire credit or make purchases using the false identity. Credit History A record of a consumer's past borrowing and repaying behavior. It is used as an indication of whether or not the consumer is likely to pay future accounts on time. Credit Line The maximum amount of credit to be extended to a consumer by a lender Credit Repair Agencies/Credit Clinics Companies that work to "repair" or "remove" a consumer's bad credit *Credit Report A record or file used by a prospective lender or employer that chronicles the credit standing of a prospective borrower. It is used to help determine creditworthiness of the potential borrower. Credit Risk The possibility that a consumer will or will not repay an outstanding debt in a timely manner. Creditworthiness A creditor's measure of a consumer's past credit behavior from which a lender will determine whether or not to extend credit based on the consumer's ability and willingness to meet future debt obligations. D Debit Card A card that allows purchases to be deducted directly from a consumer's personal checking account Debt-to-Income Ratio The debt you owe compared to your income Default The act of failing to meet an agreed-upon financial obligation, such as making required payments for a loan or debt on a timely basis. Delinquency (30, 60 or 90 days) Past-due payment on a loan Discretionary Income Money you have left over when all other expenses and financial obligations have been paid Disposable Income Money that is left over after taxes have been deducted Dispute To question the accuracy of information on a credit report. Disputes may now be resolved effectively by notifying Equifax online. E Equal Credit Opportunity Act (ECOA) The Equal Credit Opportunity Act (ECOA) is a federal law that ensures that all consumers are given an equal chance to obtain credit without discrimination. However, this does not mean all consumers who apply for credit get it. Factors such as income, expenses, debt, and credit history are taken into consideration for creditworthiness F Fair Credit Reporting Act (1971; amended in 1997) A federal law that enables consumers to learn what information credit reporting agencies have on file about them, and to dispute errors in the file. It also specifies permissible purposes for which credit reports may be requested. It provides consumers with the right to obtain a copy of their report at no charge if their have been turned down for credit. G Garnishment The seizing of a person's property, credit or salary, or wages on the basis of a law whereby a creditor has obtained judged to do so in order to pay off a debt. Grace Period A period of time allowed in order to avoid finance charges by paying off the balance in full before the date it is due. Gross Monthly Income The amount one earns before taxes are deducted H Home Equity Loan/Equity Loan/Second Mortgage A loan that is based on difference of the amount of the home's current market value and the equity already paid on a home. The majority of interest on a home equity loan is tax deductible. However, if your loan is not paid, your home may be sold in order to pay off the debt. I Identity Fraud A criminal offense involving using another's personal information such as their name or Social Security, etc. in order to acquire credit or make purchases using the false identity. Installment Loan A credit account where the payment amount and the number of payments are fixed or predetermined. Interest
A charge for lending or borrowing money which is usually based on a percentage of the amount borrowed or loaned Interest Rate The amount a lender charges for borrowing money. L Late Fee A fee that is attached to an account that is overdue in payment. Lien A legal claim that gives the right to take real or personal property of a debtor and have it be held for security or sold in order to pay for a debt. Line of credit A credit limit extended up to a certain amount that is established by a creditor M Mortgage Debts
Any loans secured by your real estate that include first mortgages and home equity loans, as well as second homes and investment property O Open Account An account that is still being paid or currently active. Opt Out Limiting how much information about you is shared with others. Examples are opting out of insurance or credit offers that you did not initiate. P Permissible Purpose There are specific reasons deemed "permissible" for requesting a credit report as defined in Section 604 of the Fair Credit Reporting Act. Any request that does not meet this criteria must be denied. Personal Line of Credit A predetermined maximum amount on can owe at any time which is based on personal financial situations such as income, credit history and debt. Principal Balance of a loan that has not been paid which is exclusive of interest and other charges. Public Record
Court record which contains information about judgments against you in civil actions such as state or federal tax liens and bankruptcy filings. Public records are available and open to any person who requests them. R Repossession The act of a creditor reclaiming possession of an item sold to you usually for failure to pay installments that were due. *Revolving Charge Account An account that 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. Revolving Balance A total balance of all revolving credit accounts S Secured Credit Card A credit card that is secured by a savings account Service Charge Charges applied to an account for additional services Smart Card A credit-type card that electronically stores account information in the card itself. It is usually a prepaid cash card and is sold at banks and is able to be exchanged at face value. T Tax Lien A claim upon real or personal property for the satisfaction of unclaimed taxes Term A limited period of time in which a loan must be fully repaid. 3-in-1 Credit Report
A comprehensive report that contains information from the three major credit reporting agencies.
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