Credit Glossary
AccountAn account is the relationship between a consumer and a company. An open account means the relationship is ongoing, while a closed account indicates the relationship has ended.
Account NumberAn account number is a unique number that identifies the account a consumer has with a company. Adverse Action An adverse action is an unfavorable action, which could include being rejected for a line of credit. The reason for an adverse action must be divulged by the creditor.
Bank CardA bank card is a card issued by a bank which is linked directly to a bank account. Bankruptcy Bankruptcy is a legal process that allows a person or business to alleviate some debts, sometimes at the expense of the creditor.
Billing CycleThe billing cycle is the time between your latest bill and your previous bill.
Chapter 7 BankruptcyChapter 7 bankruptcy issues court-administered liquidation of the assets of an individual or business that is not capable of repaying debts.
Chapter 11 BankruptcyChapter 11 bankruptcy allows for a troubled business to reorganize as an alternative to liquidation.
Chapter 12 BankruptcyChapter 12 bankruptcy is bankruptcy that applies to the farming industry.
Chapter 13 BankruptcyChapter 13 bankruptcy results in the debtor repaying the debts on a schedule agreed upon by the debtor, creditors and court.
Charge CardA charge card is a credit card that must be paid in full every month, with no interest rate.
CollateralCollateral is property owned by the consumer that is to be forfeited by the consumer if the loan is not repaid.
CreditCredit is the ability to borrow money or services on the agreement that it will be repaid.
Credit BureauA credit bureau is a company that gathers information on consumers and their credit, and then distributes that history at a cost to other potential creditors.
Credit CardA credit card is a card issued by a creditor with a maximum amount of credit that may be placed on the account. This account requires the consumer to pay a monthly payment until the balance is paid off.
Credit LimitYour credit limit is the maximum amount you may charge on a credit card.
Credit ReportA credit report is a record of your present and past credit use. Under the Fair Credit Reporting Act, you have the right to see your credit history.
Credit RiskAn assessment of the likelihood a consumer will be able to fulfill the credit agreement.
Credit ScoreA credit score is a calculated score determined from a number of factors that indicates a consumer’s credit worthiness.
CreditorA creditor is any company or individual that issues credit to consumers.
DefaultA default is a failure to meet the repayments agreed upon in the credit agreement.
DisputeA dispute is a questioning of the accuracy of information in a credit report.
FraudFraud is intentional misuse of information in order to cause someone to give up something of value.
IdentityThe characteristics of an individual consumer. Identity information includes any information that can help identify a consumer, including social security number, date of birth, etc.
InquiryAn examination of a consumer’s credit history.
Installment LoanAn installment loan is a loan in which the repayment is divided into amounts to be repaid at specific intervals as defined in the terms of the loan.
LienLien is interest that a creditor maintains in the consumer’s property until the debt has been paid.
MortgageA mortgage is an agreement where the owner places a real property as collateral for a loan.
Permissible PurposeA permissible purpose is a particular circumstance under which a potential creditor may access a consumer credit report from a credit bureau under the Fair Credit Reporting Act.
Public RecordPublic record refers to information available to the general public, including court judgments and bankruptcy.
Retail CardA retail card is a credit card issued by a retail store.
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