Credit Vocabulary |
Credit and debt related terms that are on used on this site.
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View Glossary |
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| There are 33 entries in the glossary. |
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| Capacity | Factor in determining creditworthiness. Capacity is assessed by weighing a borrower’s earning ability and the likelihood of continuing income against the amount of debt the borrower carries at the time the application for credit is made. While capacity may be considered in a credit decision, the credit report does not contain information about earning ability or the likelihood of continuing income. |
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| Chapter 11 Bankruptcy | Chapter of the Bankruptcy Code that is usually used for the reorganization of a financially troubled business. Used as an alternative to liquidation under Chapter 7. The U.S. Supreme Court has held that an individual may also use Chapter 11. |
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| Chapter 12 Bankruptcy | Chapter of the Bankruptcy Code adopted to address the financial crisis of the nation’s farming community. Cases under this chapter are administered like Chapter 11 cases, but with special protections to meet the special conditions of family farm operations. |
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| Chapter 13 Bankruptcy | Chapter of the Bankruptcy Code in which debtors repay debts according to a plan accepted by the debtor, the creditors and the court. Plan payments usually come from the debtor’s future income and are paid to creditors through the court system and the bankruptcy trustee. |
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| Chapter 7 Bankruptcy | Chapter of the Bankruptcy Code that provides for court administered liquidation of the assets of a financially troubled individual or business. |
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| Charge Card | A card which requires payment in full upon receipt of the statement. |
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| Charge Off | Accounting term to indicate that the creditor does not expect to collect a balance owing on an account. |
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| Charge-Off | Action of transferring accounts deemed uncollectible to a category such as bad debt or loss. Collectors will usually continue to solicit payments, but the accounts are no longer considered part of a company’s receivable or profit picture. |
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| Civil Action | Any court action against a consumer to regain money for someone else. Usually, it will be a wage assignment, child support judgment, small claims judgment or a civil judgment. |
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| Claim amount | The amount awarded in a court action. |
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| Closed Date | The date an account was closed. |
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| Co signer | Person who pledges in writing as part of a credit contract to repay the debt if the borrower fails to do so. The account displays on both the borrower’s and the co-signer’s credit reports. |
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| Co-maker | A creditworthy co-maker is sometimes required in situations where an applicant’s qualifications are marginal. A co-maker is legally responsible to repay the charges in the joint account agreement. |
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| Co-Signer | Person responsible for repaying a debt if the borrower defaults. |
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| Collateral | Property acceptable as security for a loan or other obligation. |
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| Collection | A creditor’s attempt to recover a past-due payment by turning the account over to a collection department or company. Having a debt in collection is a serious negative item on a credit report. |
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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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| Consumer | Person who uses and/or buys goods and services for family or personal use. |
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| 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 work out a successful repayment plan. Consumer Credit Counseling Service has offices throughout the United States that can be located by calling 800 388 CCCS (2227) |
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| Credit | A trust or a promise to pay later for goods or services purchased today. |
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| Credit bureau | A credit-reporting agency that is a clearinghouse for information on the credit rating of individuals or firms. Often called a credit repository or a consumer reporting agency. |
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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 Consultant | Trained and educated professionals who help consumers to understand their credit rights, help them to determine if they need to file for bankruptcy or not, help them to improve their credit reports and raise their credit scores, help to negotiate their debt, and thoroughly educate their clients on different aspects of their credit and financial status so that they know what all of their options are. |
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| Credit Grantor | Person or business furnishing consumer goods and/or services on credit. |
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| Credit History | A record of a person’s use of credit over time. |
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| Credit items | Information reported by current or past creditors. |
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| Credit Limit | The maximum amount of money you can charge on a particular credit account. |
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| Credit Limit/Line of Credit | In open-end credit, the maximum amount a borrower can draw upon or the maximum that an account can show as outstanding. |
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| Credit Repair Companies | Individuals or companies that can help consumers to repair, rebuild and reestablish their credit, credit reports and to improve their credit scores so that they can obtain better interest rates on loans, better jobs, lower insurance premiums, obtain rental apartments, etc. |
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| Credit risk | The measure of a person’s creditworthiness. People who are more likely to repay their debts on time are considered a better risk by lenders, and will be charged lower interest rates for borrowing money. |
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| Credit Scoring | Tool used by credit grantors to provide an objective means of determining risks in granting credit. Credit scoring increases efficiency and timely response in the credit granting process. Credit scoring criteria is set by the credit grantor. |
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| Creditworthiness | The ability of a consumer to receive favorable consideration and approval for the use of credit from an establishment to which they applied. |
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Glossary V2.0 |
