Activity Any transaction that appears on your bill, including purchases, cash advances, finance charges, fees and payments.
Adjustable Rate Mortgages (ARM)- Mortgage that is set with an interest rate that can vary. This is typically done in preset time periods throughout the mortgage.
Adjusted Balance Method of calculating finance charges where the annual percentage rate is applied to the remaining balance on the account after all purchases and payments are posted.
Annual Percentage Rate (APR)- Rate at which interest is applied to applied to an account over the time period of one year.
Annuity-income from capital investment paid in a series of regular payments
Asset Anything owned that has a value
ATM charges Fees charged by servicing banks when funds are withdrawn from an automated teller machine.
Available Credit The unused portion of the credit limit on an account.
Average Daily Balance Method of calculating finance charges where the annual percentage rate is applied the average balance during the billing cycle that is being calculated.
Bankruptcy Legal proceeding to absolve or restructure outstanding debts
Bankruptcy Discharged– A court order terminating bankruptcy proceedings on old debts.
Bankruptcy Dismissed When a bankruptcy proceeding is denied leaving the debtor liable for the outstanding debt.
Balloon/Reset Mortgage– A mortgage with monthly payments based on a 30-year amortization schedule. With this type the unpaid principal balance is due in a lump sum payment at the end of a specific period, usually 5 or 7 years.
Billing Cycle Time period for monthly billing. Typically 30 days.
Bond-A certificate of debt issued by a government or corporation guaranteeing payment of the original investment plus interest by a specified future date.
Budget A statement of anticipated income and expenses for a specific period of time.
Capital Gains Amounts earned in interest on accounts.
Cash advance Fees Fee charged by lenders for accepting cash advance from available credit.
Certificate of Deposit (CD)– An interest-bearing bank receipt for a specified amount of money which usually matures between three months and three years. The interest rate earned depends on the amount of money and length of time of the deposit.
Charge Off Status of account that has been written off as a bad debt or not collectable. A consumer still owes the remaining balance.
Closing Date The end of a billing cycle
Collateral Item held as a security guaranteeing repayment of a debt. The item may be collected if payment is not made on an account.
Collection Agency Company that accepts outsourced collection accounts from lenders. Collection Agencies typically will attempt to collect on an outstanding debt for a percentage of the amount collected.
Compound Interest Interest computed on the accumulated unpaid interest as well as on the original principal.
Co-Signer Secondary person on an account guaranteeing that the debt will be paid. If the original borrower does not make payments the co-signer will be liable for the unpaid balance.
Credit Extension of funds on the agreement that the funds will repaid on certain dates.
Credit Bureau Institution that holds consumer credit files. The records maintain may be accessed by consumers applying for credit or lenders looking to make a decision on lending.
Credit Card Account issued by lenders allowing consumers to make purchases. These typically hold an annual percentage rate and fluctuating minimum payment requirements.
Credit Grantor Persons or institutions that extend credit
Credit History An individual history of previous credit accounts were maintained.
Credit limit The maximum amount of credit available on an account.
Credit Line Any extension of credit.
Credit Report File maintained by credit bureaus showing all of a consumers credit accounts, public records, and payment history.
Debt Amount owed to a person or institution.
Debt Management Program developed by banks to assist consumers in repayment of their debts.
Debt Recovery Collection activity engaged in by creditors for outstanding debts.
Debt Settlement Negotiating to repay creditors a lesser amount than is actually owed.
Default Failure to pay a debt as outlined in the original agreement.
Delinquency– A debt or other financial obligation on which payment is overdue.
Derogatory Information Generally refers to negative information in a consumers credit report.
Discretionary Income Amount of income remaining after all obligations have been met.
Finance Charge Total amount of interest and fees accumulated in given billing period.
Financial Narrative CodeIndicator on a consumers credit report that reflects a certain activity.
Fixed Interest Annual percentage rate that does not fluctuate throughout the term of a debt. This is subject to change if certain terms are not met.
Fixed Rate Mortgages A mortgage that maintains the same annual percentage rate throughout the full term. Generally the premier option for consumers looking for protection from inflation.
Garnishment– A legal proceeding whereby money or property due a debtor but in the possession of another is applied to the payment of the debt owed to the plaintiff. Generally carried out as a garnishment of wages to collect an outstanding debt.
Grace Period Time frame following the due date on an account for the payment to be received without penalty.
Gross Income Total income prior to any deductions.
Installment Loans Loan granted with a fixed payment schedule and interest rate.
Interest– A charge for borrowed money, generally a percentage of the amount owed.
Joint Account An account opened with multiple users, each share the same responsibilities with the debt.
Judgment– A determination of a court of law; a judicial decision determining that a defendant is held liable for the outstanding debt.
Late fee Fee assessed to an account when a payment is made late.
Lease Term agreement for use of property. Example: Car lease or Apartment Lease. No equity is built in a lease agreement and the property needs to be returned when the term is up.
Liabilities Responsibility for unpaid debts.
Liens Attachment to property for an outstanding debt. The property is held as a collateral until the debt is paid. If the debt is not repaid, the property can be sold to cover the debt.
Merchant Cards Credit accounts extended to consumers by merchants for specific use in their store. Example Sears, JC Penny etc.
Money Market Funds– A type of mutual fund that invests in short-term securities such as Certificates of Deposits
Monthly Periodic Rate The amount of the annual percentage rate divided by 12.
Mortgage Loan issued for the purchase of a home or property. There are several different types of mortgages
Net Income Total income after all deductions have been made.
Over limit fees Fee assessed each month that the outstanding balance exceeds the initial credit limit.
Past Due Amount Remaining amount of payment due from a previous billing cycle.
Past Due Fees Fee assessed for having a past due payment amount during a billing cycle.
Previous Balance Method of calculating finance charge where the annual percentage rate is applied to the balance at the end of the previous billing cycle.
Principle Initial amount owed on a loan or credit account.
Public Records An information field on a consumers credit report typically containing any collection accounts, judgments, liens, or garnishments.
Revolving Account An account that maintains a balance each month.
Secured Debt A debt that has a form of collateral attached to it. If the debt is not repaid as scheduled then the collateral can be collected.
Simple Interest Interest applied only on the original principal, not on the interest accrued. This means that out of each months payment a fixed amount will be applied towards finance charges and a fixed amount will be applied towards principle.
Transaction fees Fees charged for any activity on an account.
Variable Interest Rate Interest rate on an account that is not fixed and may be changed according to the original agreement.