Credit Report and Credit Score Terms & Definitions

Glossary of Credit Report Terms and Credit Repair Definitions

Annual Percentage Rate (APR)
Appraisal Fee
Asset
Automated Teller Machines (ATMs)
Balloon Payment
Billing Error
Fair Credit Billing Act.
Business Days
Collateral
Co-signer
Credit
Credit Bureau
Credit Card
Credit History
Creditor
Credit-related Insurance
Credit Scoring System
Creditworthiness
Debit Card (EFT Card)
Default
Disclosures
Elderly Applicant
Electronic Fund Transfer (EFT) Systems
Finance Charge
Home Equity Line of Credit
Joint Account
Late Payment
Lessee
Lessor
Liability on an Account
Open-End Credit
Open-End Lease
Overdraft Checking
Point-of-Sale (POS)
Points and Origination Fees
Punitive Damages
Rescission
Security
Security Interest
Service Charge

up   Annual Percentage Rate
(APR) — The cost of credit as a yearly rate.

up   Appraisal Fee
The charge for estimating the value of the property offered as security.

up   Asset
Property that you possess that creditors (and collectors) can use to repay debt, such as stocks and bonds or a car.

up   Automated
Teller Machines (ATMs) — Electronic terminals located on bank premises or elsewhere, through which customers of financial institutions may make deposits, withdrawals, or other transactions as they would through a bank teller.

up   Balloon Payment
The balloon payment is a large extra payment charged at the end of a loan or lease.

up   Billing Error
Any mistake in your monthly statement as defined by the

up   The Fair Credit Billing Act.

up   Business Days
Check with your institution to find out what days it counts as business days under the Truth in Lending and Electronic Fund Transfer Acts.

up   Collateral
The property offered to support a loan and subject to seizure if you default.

up   Co-signer
Another person who signs your loan and assumes equal responsibility for it.

up   Credit
The right granted by a creditor to pay in the future to buy or borrow in the present; a sum of money due to a person or business.

up   Credit Bureau
The agencies that create and maintain credit records on consumers.

up   Credit Card
Any card, plate, or coupon book used from time to time or over and over again to borrow money or buy goods or services on credit.

up   Credit History
The record of how you’ve borrowed and repaid debts.

up   Creditor
A person or business from whom you borrow or to whom you owe money.

up   Credit-related Insurance
Health, life, or accident insurance designed to pay the outstanding balance of the debt.

up   Credit Scoring System
A statistical system used to rate credit applicants according to various characteristics relevant to creditworthiness.

up   Creditworthiness
Past and future ability to repay debts.

up   Debit Card
(EFT Card) — A plastic card looks similar to a credit card, that consumers may use to make purchases, withdrawals, or other types of electronic fund transfers.

up   Default
Failure to repay a loan or otherwise meet the terms of your credit agreement.

up   Disclosures
A disclosure describes the information given to consumers about their financial dealings.

up   Elderly Applicant
As defined in the Equal Credit Opportunity Act, a person 62 or older.

up   Electronic Fund Transfer
(EFT) Systems — A variety of systems and technologies for transferring funds electronically rather than by check.

up   Finance Charge
The total dollar amount that credit will cost.

up   Home Equity Line of Credit
A form of open open-ended credit in which the home serves as collateral.

up   Joint Account
A credit account held by two or more people so that all can use the account, and all assume legal responsibility to repay.

up   Late Payment
A payment made later than agreed upon in a credit contract and on which the creditor may apply additional charges.

up   Lessee
A person who signs a lease to get temporary use of the property.

up   Lessor
A company that provides temporary use of property usually in return for a periodic payment.

up   Liability on an Account
Legal responsibility to repay debt.

up   Open-End Credit
A line of credit that may be used over and over again, including credit cards, overdraft credit accounts, and home equity lines.

up   Open-End Lease
An open-end lease involves a balloon payment based on the value of the property when returned.

up   Overdraft Checking
A line of credit that allows you to write checks or draw funds using an EFT card for more than your actual balance, with an interest charge on the overdraft.

up   Point-of-Sale
(POS) — A method by which consumers can pay for purchases by having their deposit accounts debited electronically without the use of checks.

up   Points and Origination Fees
Points are finance charges paid at the beginning of a mortgage in addition to monthly interest. One point equals one percent of the loan amount. An origination fee covers the lender’s work in preparing your mortgage loan.

up   Punitive Damages
Damages awarded by a court above actual damages as punishment for a violation of the law.

up   Rescission
The cancellation or “unwinding” of a contract.

up   Security
Property pledged to the creditor in case of loan default; see collateral.

up   Security Interest
The creditor’s right to take property or a portion of property offered as security.

up   Service Charge
A service charge is a component of finance charges, such as the fee for triggering an overdraft checking account into use