Refers to the current state of an account. For example, an account might be open, foreclosed, paid, or settled. Other possible options include: paid, charge off, repossession, et al. No payment history is indicated solely by the Account Condition status.
This is a number which is assigned to your account by a creditor. Each number is unique to a particular consumer. You should take as many steps as possible to protect this number. Experian (a major credit reporting agency), for example, asterisk out part of your account number when communicating with you.
Accounts in Good Standing
These accounts are currently up to date and have no payments owing on them. If all of your accounts are in good standing, you will not be in arrears, and will not have any amounts overdue.
If you are declared bankrupt under Chapter 13, an adjustment is the amount (expressed as a percentage) which you will still have to repay to your creditors.
(Also known as).
Because there are no transaction fees on a credit card, card issuers will usually require you to pay an account fee every 6 months (or yearly) to cover the cost of the service of the card. Depending on which type of card you have, the fee could be between $10 and $100.
Annual Percentage Rate
Despite the fact that most consumers know what the annual interest rate is on their credit cards, the real annual rate is actually quite different (due to compounding interest). Hence, the annual percentage rate is the true value of the annual interest cost, expressed as a percentage.
Many credit card holders want to allow a close relative use of their card on a regular basis. However, having only a single credit card can be a nuisance. As an authorized user, a second card is issued to a second person – but linked to the same account.
Hence, two people can use the credit card account, whilst a single person is responsible for the repayments.
This is a single, lump sum payment, which is required at some point during the loan life. It might be at the beginning (i.e. deposit) – or at the end.
A set of federal laws clearly stating the process by which a consumer is officially declared bankrupt, and the ways in which their outstanding debts are dealt with.
The capacity of a consumer is one of the factors involved in the credit decision making process. This factor is calculated by weighing the borrower’s salary or earning ability against the likelihood of that income continuing in to the future.
Capacity is just one factor considered, and overall, it is given a “moderate” weighting in the overall credit decision process.
Chapter 7 Bankruptcy
A Chapter 7 Bankruptcy is defined in the Bankruptcy Code. It provides the ability for courts and mediators to administer the liquidation of any assets or cash possessed by the business or individual in trouble.
Chapter 11 Bankruptcy
A Chapter 11 Bankruptcy is defined in the Bankruptcy Code. This chapter gives permission to courts or authorized individuals to reshuffle or restructure the affairs of a business or individual.
Chapter 12 Bankruptcy
A Chapter 12 Bankruptcy is defined in the Bankruptcy Code. This is specifically for use by farmers in a crisis situation – i.e. drought or feed famine. Many special conditions apply, and special protection is awarded.
Chapter 13 Bankruptcy
A Chapter 13 Bankruptcy is defined in the Bankruptcy Code. This chapter allows for a repayment plan to be put in to place to pay off debtors over time. The court is the ultimate decider of how this repayment plan will be structured. It is assessed on the individuals or businesses expected future income.
Similar to a write-off, this is the action by which bad debts (which are unlikely to be paid in the future) are written off and assigned to the “bad debts” category.
A civil action is when two individual parties (i.e. two consumers or a business and an individual) dispute a payment in an official setting. Usually, civil action requires a court to make a decision on the outcome of the dispute.
The exact amount awarded to either a consumer or business as a result of a court case decision.
The date at which an account was closed.
A co-maker is an individual who signs and guarantees the loan of another individual. This is sometimes referred to as a “guarantor”. This is often a required component in the application process when someone is less creditworthy.
Consumer Credit Counselling Service
A service dedicated to assisting people who have bad credit. The Consumer Credit Counselling Service can be contacted in the United State on 800 388 2227.
Someone who is able to sign on behalf of another. For example – a consumer who is often out of the country might appoint a co-signer to have signing authority of all personal documents when they are not able to sign themselves.
Credit Limit / Line of Credit
This is the maximum amount which can be borrowed against a single facility. For example – if you have a credit limit of $2,000 – you can borrow any amount up to $2,000, but no more than this.
Individual entries posted to your credit report by current or past creditors.
A comprehensive overview of your standing as a consumer. All consumers have a unique credit report, with information on past and current borrowings, repayments, defaults, etc.
A system by which credit reports are reduced to a single figure immediately showing the credit worthiness of an individual. Scores range from approximately 350 (a very poor credit score) through to 800 (an extremely good score). The average score is approximately 640.
An assessment of whether or not a particular individual is worthy of receiving credit in the future. This is judged on an assessment of both your credit score, and the individual entries in your credit report.
The exact date that a public record was awarded to an individual or business.
Date of Status
The date that a creditor last reported an entry regarding a consumer - to the credit reporting agency.
An entry on a credit report noting when a particular account (loan, mortgage, etc) was opened.
The exact date on which a public record was settled. This is usually included in a credit report.
A status which indicates that the repayments on a particular account are currently overdue. Delinquent is the stage before default or foreclosure – and any accounts currently in delinquency will negatively affect your credit score.
If an individual is deemed to be bankrupt, a discharge is awarded by the courts after a bankruptcy hearing to indicate that the debts incurred by the individual are no longer their responsibility. It should be noted that some debts may not be included in a bankruptcy – and therefore even after discharge, the consumer will still be liable for these amounts.
Under USA law, a credit reporting agency is required to release all information held about a consumer to that particular individual, if and when requested. This is why you don’t automatically receive a copy of your credit information unless you specifically request it.
If a court believes that awarding a bankruptcy claim would be unjust to creditors or other interested parties, they can dismiss the case. In other words, if your bankruptcy is dismissed, you will not be able to continue with your bankruptcy claim.
A dispute arises when an entry is spotted on a credit report which is either incorrect, fraudulent, or an outright mistake. Each credit reporting agency has a process by which you are able to dispute entries on your credit report if you find them. Because of the sensitive nature of credit information, you are recommended to check for errors at least twice per year.
This stands for Equal Credit Opportunity Act, and is a component of USA credit law.
An end user is the party (either a business or individual) who requests a copy of another consumer’s credit report. The end-user then uses this information for decision making purposes.
Equal Credit Opportunity Act
When an end-user is deciding whether to allow a credit application to proceed or not, the ECOA prevents this end-user from basing their judgement on race, sex, religion, sexuality, or age.
This is one of the three largest credit reporting agencies in the country. The headquarters of Equifax are in Atlanta.
This is one of the three largest credit reporting agencies in the country. The headquarters of Experian are in Costa Mesa, CA.
Fair Credit and Charge Card Disclosure Act
This act is a part of USA law, and governs the disclosure of costs involved with having a credit card. Interest, account fees, and all secondary charges must be disclosed to the consumer.
Fair Credit Billing Act
This act provides legislation governing the disputes process of a credit entry on a credit report. If you find an erroneous or fraudulent entry on the report, you are entitled to a fair process to get this removed.
Fair Credit Reporting Act (FCRA)
Governs the actions of all credit reporting agencies in America. (Not just the main three).
Fair Debt Collection Practices Act (FDCPA)
Provides protection for consumers against unfair repossession practices. Violence, threats, and other non-mainstream behaviour is prohibited.
This is the amount of interest which is charge on a particular loan. Essentially, this is the cost of having money owing.
An annual rate of interest on an outstanding debt which does not change. It is “fixed” for a certain period, and is therefore unaffected by things such as federal funds rate changes.
Formal pre-fixes to your name. For example – Mr Mrs Jr. IV, etc.
A geographical code is a unique identifier for a particular place in America. The codes are similar, but not the same as ZIP codes.
An extension of time given in good will to a consumer or business which is already delinquent on a loan. A grace period gives the entity a chance to make the repayment, without foreclosure or default processes being started.
A joint person who acknowledges the responsibility of a loan. The guarantor would have to pay back the loan if the borrower defaulted.
This is the largest or highest amount that has ever been owed on a particular loan. If you have been meeting repayments, the high balance should equal the starting amount of the loan and no more.
A debt which is divided up and charged to a consumer or business at specified intervals. This is a way of structuring a loan, or restructuring an existing debt to make it easier to pay.
When a consumer disputes an entry on their credit report, the contact the credit reporting agency, and an investigation takes place. During the investigation process, enquiries will be made in to the exact entry which is being disputed. Following the investigation, the outcome will either be a change to the entry, or no change.
Investigative Consumer Reports
An investigative consumer report is often done when a company requests information on a particular consumer. This might be for background checking, security clearance, or to clear an employee for a sensitive job.
If a loan is outstanding to a creditor, and the consumer is not able to pay the loan for whatever reason, that creditor can request that a court put the consumer in to bankruptcy.
This statement offers an explanation and usually accompanies a credit report. If you don’t understand an entry on your credit report or public record, you can then read the explanation of that record on the item-specific statement.
The outcome of a particular court action. The judgement granted is the final say by the judge, and is binding on any parties involved.
This is the last date that a creditor reported information to a credit report.
The total amount which is currently owing to a creditor. This is the amount you are legally obligated to pay to that creditor.
A lien is a security over someone else’s property. For example, if a consumer fails to pay off an outstanding amount, the creditor can place a lien on the consumer’s property. That means that the property cannot be sold, exchanged, or traded until the outstanding amount is settled, and the lien is taken off.
Line of Credit
A line of credit is a pre-determined amount that a consumer can borrow, if and when they want to. Consumers with a line of credit can make repayments as they see fit, and are only charged when an amount is outstanding.
The exact book or page number where an item is filed on court records.
Mortgage Identification Number (MIN)
Issued when a loan is registered on the Mortgage Electronic Registration Systems Inc. database. This is a record of ownership rights to property in America.
Notice of Results
When you request an investigation in to your credit report, entries are often changed as a result. If you have recently applied for credit, a notice of results allows the credit reporting agency to send a notice of the erroneous entry and it’s correct status to that creditor.
This refers to the amount of time which negative information is held on your credit report. By law, a maximum of 10 years is applicable to bankruptcy and 7 years to all other negative entries (i.e. foreclosure). Some items, however, stay on the report indefinitely. One example of such an entry would be a tax lien.
People who have opted-in will receive pre-screened credit and insurance offers by mail or email – depending on their current credit score and report. You are usually only opted-in if you request to do so with your credit reporting agency, and you can opt out at any time by contacting them.
All consumers are fully entitled to opt out of the pre-screened mailing lists on their request. If you do no longer want to receive such information, simply contact your credit reporting agency and opt out.
This is the amount which the loan or debt started off at.
The payment status gives an overview of the state of a current outstanding amount. If you are paying your account on time, the status will be “current account”. If you miss a payment however, the resulting status might be “delinquent” – until you make the needed payment.
These are the possible reasons why a consumer, company, or creditor may request a copy of your credit report. Possible reasons might be employment, credit applications, insurance underwriting, court orders, government requests, etc.
Any information on a credit report which might link back to you – in person. All personal information is kept secure and confidential by the credit reporting agency. Information includes full names, phone numbers, social security number, etc.
If you request an explanation of your credit report, a personal statement will be issued. This offers an explanation of each and every entry on your credit score, and is visible not only by you – but by anyone who requests a copy of your credit score for 2 years.
Consumers who file for bankruptcy will have a waiting period before being deemed bankrupt. Until the bankruptcy is accepted in court, the application for bankruptcy is known as a petition.
Someone who initiates a court complaint against another person. The opposing party is known as the “defendant”.
Potentially Negative Items
Any items on the credit report which might be interpreted negatively by potential creditors.
Public Record Data
Information which is not kept confidential on your credit report – i.e. anyone who enquires can see it. This information includes tax liens, lawsuits, and debt related judgements.
The most recent amount which has been reported as “owing” by a creditor.
The amount which was most recently paid off a particular account. This is an amount reported by the creditor.
If a lien has been satisfied, the result is that the property under lien is “released” from that outstanding obligation.
Each Experian credit report (and each report with other credit agencies) has a unique identification number used in correspondence. This is similar to an account number.
This is the starting date that a creditor began sending updates to a credit reporting agency.
The taking of an asset which was used to secure a debt originally. If you fail to meet your payment obligations, the creditor can repossess the asset (whether it be a car, TV, or house) in order to sell it and recuperate the amount owing.
Request an Investigation
When you see an entry on your credit report which you believe is incorrect or fraudulent, you can request an investigation to have the entry evaluated. There is no cost for this process, however it can take up to 30 days to complete – so it’s best that you allow for this period of time before applying for new credit.
Request for Your Credit History
When you submit a request for your credit history, you will be sent a complete report including all transactions which have been entered on to your report in the last 7 years. Additionally, a request can come from a business, creditor, or third party, who is taking an interest in your credit worthiness.
Third parties may only request your credit history if you have expressly permitted them to. This requires your signature.
This indicated exactly who is responsible for the repayment of a particular debt – whether it be you, or another person (i.e. you were a co-signer).
An amount of money is constantly available, provided that you make the regular repayments when you borrow money. This is similar to a line of credit.
Risk Scoring Models
Computer based models which calculate your credit risk as a consumer. Your credit score is not worked out by hand, but instead by a risk scoring model.
When you have paid all of your outstanding debts – you have “satisfied” your obligations.
Credit or debt facilities which are advanced to you on the basis that you provide security for them. Security may be in the form of an asset such as your car, TV, or house – or it may be secured cash in a term investment.
Security is an asset, such as a TV, house, car, or other tangible property which is used to “secure” a loan advanced to you. If you fail to make the repayments on the loan, the creditor can repossess the items used as security.
An alert added to your credit report which notifies you and potential creditors that your account has been subject to fraud in the past. This lets people know that bizarre entries or potentially incorrect entries may be present on the report.
A service credit is an acknowledgement that you have on-going liabilities as a result of a service you use. For example, you might receive power to your house. You usually use the power before you pay for it –and therefore the service credit is the power which is used before the charge is made.
The event where you and a third party reach an agreement over an amount which is outstanding.
The originating party where information came from. For example, the source of a particular entry on your credit report would be the company or person who notified the credit reporting agency that it occurred.
The status is an indication of the current standing of a particular account.
The condition under which a loan is advanced. For example – you might have 60 months to repay a loan in its entirety.
A second party which is contracted to collect a debt on behalf of a creditor.
A tradeline is an entry made to a particular credit report by a creditor of a consumer. The entry contains all different types of information, such as the status, payment history, and credit worthiness of a particular loan.
All credit cards, loans, and debts have transaction fees associated with them. These are essentially the costs of having the loan outstanding at any one time. Transaction fees can also be affected by the amount of the loan, and the finance company which advances the loan.
This is one of the three largest credit reporting agencies in the country.
Truth in Lending Act
A law which requires annual interest rates on loans be disclosed publicly for consumers to see. For example – if a bank is offering home loans, the interest rate on that loan per annum must be disclosed.
The type of loan account which is offered. Examples include – fixed rate loan, revolving credit, etc.
Any loan which is advanced without the need for an asset securing the debt. For example – a loan which is awarded to you without the need to provide you house, car, or TV as security. If you default on the loan, the creditor does not have the right to repossess your property.
This is a judgement made by a court of law which was set aside by another court. If you appeal, you may find that the higher court vacates the previous court’s ruling.
An interest rate which is subject to change without notice. For example, if the official cash rate moves during the term of the loan – you may find that the bank adjusts the variable rate to reflect this change.
The process by which the entries on a credit report are verified. If you request a copy of your report, you are recommended to check it for accuracy. If you find errors, you should contact the credit reporting agency as soon as possible.
This is a statement which is added to your credit report, if you have been targeted by a scammer or hacker. This shows future creditors that you have suffered as a result of the fraudulent activity, and therefore it might offer some respite when it comes to lending in the future.
A bankruptcy proceeding which takes place as a result of your voluntary action.
An agreement which is reached between a consumer and a lender – which gives the lender the right to take a portion of the consumers wages (each pay check) to cover the loan which went in to default.
An action by the creditor which is taken after a bankruptcy file is submitted, which essentially relives the consumer of any obligation, and therefore means that they are not subject to a bankruptcy hearing.
Writ of Replevin
A court order which allows the creditor to repossess an asset, which was used as security for a loan, due to the failure to repay that loan.
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