Accelerated Payment - Scheduled payment plus additional monthly payment. Leads to quicker payoff of debt and less interest paid over life of loan.
Account Monitoring - Once lenders make a "yes" decision, they might want to review your credit report on a regular basis as they continue to manage their financial risk. This monitoring, called account monitoring, scans credit reports for certain risk characteristics as defined by the lender. Federal law specifically permits lenders to monitor their accounts. When you signed your credit application, you gave the lender permission to access your credit report from time to time.
Accounts in Good Standing - Lists credit items that are positive and should help your creditworthiness. Account information includes the creditor's name and address, your account number, the status (current, paid, closed, etc.), type and terms of the account, and additional information as reported to us by your creditors. Some creditors may not report to us, so all of your accounts may not be listed.
Accrued Interest - interest that has accumulated since the last payment.
Acquisition Fee - Refers to the price to purchase another company or property.
Additional Monthly Payment - The amount of your extra payment per month. This amount is in addition to your minimum required payment. This payment will be used to reduce your principal balance more quickly than if you only made your regular payment.
Adjustable Rate Mortgage - A mortgage where the interest rate is liable to change over the term of the loan and which is dependent on influences such as interest rates on Treasury securities.
Adjustment Service Company - a firm that, for a fee, will help a person set up a budget. Customers generally make one payment to the company and the company in turn distributes the available money to the customer’s various creditors.
Adjustment - The percentage of debt to be repaid to credit grantors in a Chapter 13 bankruptcy.
Affinity Card - A card that is offered jointly by two organizations. One is a credit card issuer and the other is a professional association, special interest group or other non-bank company. For example, Citibank and American Airlines sponsor the Citibank AAdvantage card.
AKA - Abbriviation term 'Also Known As'
Amortization - The process of fully paying off your debt by installments of principal and earned interest over a fixed time.
Amount Past Due - Current payment or amount delinquent on a loan.
Annual Fees - A charge levied each year for use of a credit card / a yearly fee charged by credit card issuer or credit grantors for the privilege of using a credit card / The once a year cost of owning a credit card Some credit card providers offer cards with no annual fee. The annual fee, with interest and other fees are part of the total cost of credit. It's billed directly to your monthly statement.
Annual Income - yearly income. For married couples this is your total combined yearly income.
Annual Interest Rate - The annual interest rate charged on purchases that don't benefit from the interest-free period. The amount of interest you will pay over one year, expressed as a percentage of your balance. Maximum interest rate may be 20% or more.
Annual Percentage Rate (APR) - A measure of how much interest credit will cost you, expressed as an annual percentage.
Annual Rate of Return - The pretax rate of return on the amount you earn on savings and investments. For example, the long-term rate of return for investments in the stocks that make up the S&P 500 is about 11%. A savings account earns 2% to 5%.
Applicant - A person applying for credit privileges, employment or some other benefit.
Appraisal - An expert judgment or estimate of the quality or value of real estate, made by an appraiser, as of a given date.
Appraisal Fee - The charge for estimating the value of property offered as security.
Asset - Anything owned by an individual that has a cash value. This includes property, goods, savings, or investments.
Association Code - Describes the consumer's relationship to an account (primary responsibility, authorized users, etc.).
Authorized User - Authorized account user is a person permitted by a credit cardholder to charge goods and services on the cardholder's account. The card holder is responsible for charges made by an authorized user.
Average Daily Balance - The average daily balance is a method used to calculate finance charges on an account. It is calculated by adding the outstanding balance on each day in the billing period, and dividing that total by the number of days in the billing period. The calculation includes new purchases and payments. The daily interest rate is then applied to the daily balance to calculate the finance charge.
Bad Debt - A debt that a lender has determined the borrower is not going to repay.
Balance - The total amount of money owed on a loan or credit account, or the total amount of money in a checking or savings account. In the case of a credit card, it includes any unpaid balance from the previous month, new purchases, cash advances, and any charges such as an annual fee, late fee, or interest.
Balance Transfer - Moving a balance from one account to another. In the case of a credit card account, the transfer of an outstanding credit card balance (debt) from one card to another, usually between different institutions. This is often done with special checks or forms, or may be offered as an option on some credit card applications. Some credit card issuers may offer temporary special lower rates for balance transfers. The new card issuer usually charges interest from the day the amount is transferred to the new card, there is no interest-free period.
Balloon Loan - A short term fixed rate loan which involves small payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the contract.
Balloon Payment - Balloon loans require a single, lump sum payment at the end of the loan term. This is usually a larger amount and the borrower often takes another loan to make the payment.
Bank - An institution that accepts funds for deposits, lends money and may offer other financial services such as insurance, brokerage, or trust accounts.
Bank Card - A credit or debit card issued by a bank or other financial institution.
Bankruptcy - A proceeding in U.S. Federal Court that may legally release a person from repaying debts owed. The law contains several chapters which relate to different methods of relief:
Bankruptcy - Chapter 11 - A chapter of the Bankruptcy Code that provides a type of bankruptcy where certain assets of the business or individual are sold to pay off a portion of all existing debts. (Business Reorganizations).
Bankruptcy - Chapter 12 - Farm Debt Bankruptcy
Bankruptcy - Chapter 13 - A type of bankruptcy usually used by businesses rather than individuals. Used as an alternative to liquidation under Chapter 7. (Wage Earner Repayment Plan).
Bankruptcy - Chapter 7 - A type of bankruptcy where 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 systems and the bankruptcy trustee. (Straight Bankruptcy - total liquidation of assets).
Bankruptcy Code - Federal laws governing the conditions and procedures under which persons and businesses that are unable to repay their debts can seek relief.
Bankruptcy Discharged - A court order terminating bankruptcy proceedings on old debts.
Bankruptcy Dismissed - A court order that denied one's bankruptcy petition making the debtor still liable for all debts.
Better Business Bureau - A voluntary, nonprofit group established by businesses to improve the code of business practices and to define fair standards and ethics in the conduct of the business. The Better Business Bureau is neither a government agency nor a consumer group.
Big 3 - The three largest credit reporting companies: Experian®, Equifax, and TransUnion.
Bill - A list of charges for goods sold, work performed, or services provided to the person who has agreed to pay the costs.
Billing Cycle - The number of days between statements (bills). This is generally about 25 days.
Budget - A financial plan for saving and spending money (itemizing income and expense during a projected time period).
Buydown - A lump sum payment made to the creditor by the borrower or by a third party to reduce some or all of the consumer's debt. A buydown will reduce the amount of remaining periodic payments to repay the indebtedness.