Frequently Asked Questions
Have a question about your account or protection services? View the answers to our frequently asked questions!
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Accelerated payment: is a scheduled payment plus additional monthly payment (s), leading to a quicker payoff of your debt and less interest paid over life of loan.
Account monitoring: once a lender makes a “positive” decision, they may want to review your credit report on a regular basis as they strive to manage their financial risk. This is called ”account monitoring“ and scans your credit report for certain risk characteristics defined by the lender. Federal law permits lenders to monitor their customer accounts. When you signed your credit application, you gave the lender permission to access your credit report when they see fit.
Accounts in good standing: are a list of 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 by your creditors. Not all creditors report to all the same credit bureaus.
Acquisition fee: refers to the price to purchase a company or property.
Additional monthly payment: is an extra payment made within a month. This amount is in addition to your minimum required payment. This extra payment w used to reduce your principal balance more quickly than if you only made your regular payment.
Adjustable rate mortgage: is a mortgage where the interest rate is subject to change over the term of the loan and which is dependent on influences such as interest rates on Treasury securities.
Adjustment: is the percentage of debt to be repaid to credit grantors in a Chapter 13 bankruptcy.
Affinity card: Is a card that is offered jointly by two organizations, a credit card issuer and a professional association, special interest group or other non–bank company. For example, MBNA and SPRINT sponsor the MBNA Sprint card.
AKA: means Also Known As
Amortization: is the process of fully paying off your debt by installments of principal and earned interest over a fixed time.
Amount past due: is the current amount delinquent/past due on a loan.
Annual fee: is the once–a–year cost of owning a credit card. Some credit card providers offer cards with no annual fee.
Annual income: is your yearly income. If you are married it is your total combined yearly income.
Annual interest rate: is the amount of interest you will pay over one year, stated as a percentage of your balance.
Annual Percentage Rate (APR): is a measure of how much interest credit will cost you, stated as an annual percentage.
Annual rate of return: is the pretax rate of return on the amount you earn on your savings and investments.
Appraisal: is a judgment or estimate of the quality or value of real estate, made by a licensed appraiser, as of a given date.
Appraisal fee: is the charge for estimating the value of a property which is to be offered as security.
Asset: anything “owned” by an individual that has a cash value. This includes real estate, automobiles, savings, or investments.
Authorized user: 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: is the 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.
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Bad debt: is a debt that a lender has determined the borrower is not going to repay.
Balance: is 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: is when you move a balance from one account to another. In the case of a credit card account, the balance (debt) is moved from one credit card to another. This is often done with special checks or forms. It is common for some credit card issuers to offer temporary special lower rates for balance transfers.
Balloon loan: is a short term fixed rate loan which involves smaller payments for a certain period of time and one large payment for the remaining amount of the principal at a time specified in the loan term.
Balloon payment: is a single, lump sum payment at the end of the loan term.
Bank: is an institution that accepts funds for deposits, lends money, and may offer other financial services such as insurance, brokerage, trust accounts and safe deposit boxes.
Bankcard: is a credit or debit card issued by a bank or other financial institution.
Bankruptcy codes: are Federal laws governing the conditions and procedures under which persons and businesses that are unable to repay their debts can seek relief.
Bankruptcy – Chapter 11: is a chapter of the Bankruptcy Code where certain assets of a business or individual are sold to pay off a portion of all the existing debts.
Bankruptcy – Chapter 13: is a type of bankruptcy usually used by businesses rather than individuals. Chapter 13 is often used as alternative to liquidation under Chapter 7.
Bankruptcy – Chapter 7: is a type of bankruptcy where the debtors repay the 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 a bankruptcy trustee.
Bill: is list of charges for goods sold, work performed, or services provided to the person who has agreed to pay the charges.
Billing cycle: is the number of days between billing statements. This is generally about 25 – 30 days.
Budget: is a financial plan which lists the income and expenses during a projected time period.
Business credit report: a report offering a detailed view of a company’s trade payment information, lines of credit, lending risk and payment habits.
Business credit score: a business credit score is separate from a personal credit score and helps companies determine how risky it is to do business with others.
Buydown: is a lump sum payment made to the creditor by the borrower or by a third party and reduces some or all of the consumer’s debt. A buydown reduces the amount of remaining periodic payments to repay the indebtedness.
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Capitalized cost: is recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives greater than one year.
Cascading Style Sheets (CSS): a style sheet language used in web development to dictate the design components of a web page, typically used in collaboration with HTML and JavaScript.
Cash advances: is cash withdrawn on your credit card at a bank office or ATM. Cash advances usually carry fees and a higher APR than other charges.
Cash down: is the total amount of cash used in a purchase.
Cash on hand: is the cash you have for the down payment and all closing costs.
Charge off: is an action of transferring accounts deemed uncollectible to a category such as “bad debt” or “loss”. These accounts will usually continue to be pursued by collectors but are no longer considered part of a company’s receivable or profit picture as they are unlikely to be repaid in full.
Civil action: is any court action against a consumer to regain money for someone else. If successful, a civil action will usually result in a wage assignment, child support judgment, small claims judgment or civil judgment of money to be paid.
Closed date: is the date the account was closed either at the request of the consumer or by the creditor.
Co-maker: a creditworthy co–maker is someone who is required in situations where an applicant’s qualifications have not been established or are marginal. A co–maker is legally responsible to repay the charges in the joint account agreement if the other person defaults.
Collection agency: is a service company employed to collect creditors’ unpaid or past due accounts. A collection agency is often compensated by receiving an agreed upon percentage of any amount collected.
Consolidation loan: is a loan that pays off all of your existing debt, preferably at a lower average interest rate.
Consumer: is a buyer of goods and services.
Consumer Credit Counseling Service: is a nonprofit organization that helps consumers manage and plan their use of debt.
Consumer credit information: is also known as a credit report. It includes the account/payment history of your credit relationships for seven years and public record history for ten years. Name, address, and employment history is also included.
Cosigner: is a person who states in writing as part of a credit contract to repay the debt if the borrower fails to do so.
Credit: is the provision of funds by a lender for a promise of future payment.
Credit accounts: is any loan or debt listed on your credit report.
Credit application: is a form used by a lender to obtain personal, financial and credit information to analyze and make a decision on an applicant’s credit worthiness.
Credit availability: is the amount of credit you have remaining on each of your credit accounts. It equals your credit limit minus your credit balance. This is also referred to as credit available and percentage of credit currently available.
Credit bureau: is an agency that gathers information about consumers’ credit relationships and provides creditors with credit reports and scores on consumers. The three nationwide credit bureaus are Experian, Trans Union, and Equifax.
Credit card: is a plastic card which allows the owner to obtain goods and services on credit terms without having to pay cash.
Credit card rate: is the annual interest rate you pay on outstanding credit card balances.
Credit file: is a consumer’s file with the credit bureau containing customer correspondence and statements, credit ratings, credit history and payment patterns.
Credit history: is a record of how a person has borrowed and repaid debts.
Credit investigation: is the process a consumer credit reporting agency goes through on a credit report in order to verify credit report information disputed by a consumer. The credit grantor who supplied the information will be contacted to verify the disputed information. If the information is verified, it remains on the report; if it is not, the information is deleted or corrected.
Credit limit: is the maximum amount an individual or business can borrow in connection with a specific loan.
Credit line: is the maximum dollar amount that can be charged on a specific credit account.
Creditor: is someone who extends credit to a borrower.
Credit report: a report containing information about a consumer’s identity, credit relationships, some court actions, consumers statements and previous inquiries into that file.
Credit Reporting Agencies: (also known as Credit Reporting Bureaus) are businesses that maintain historical information pertaining to the credit record of individuals or businesses. The largest U.S. consumer credit reporting agencies are Experian, Equifax, and TransUnion.
Credit union: is a mutual association formed by persons with a common affiliation such as employees, a union or a religious group in which savings are pooled. The funds are invested for appreciation and members may borrow at competitive rates.
Credit Score: a three-digit number between 300 and 850 calculated from an individual’s credit report that indicates their creditworthiness. Higher scores indicate to lenders that the individual is more likely to repay a loan.
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Digital Asset: any form of digital material (text, images, photos, animation, video, artwork, etc.) owned by an individual or a company.
Debt: is a specified sum of money that is legally owed from one party to another.
Debt consolidation: is the act of paying off all outstanding debt with a single loan.
Debt–to–income ratio: is the ratio, expressed as a percentage, which results when a borrower’s monthly payment obligation on long-term debts is divided by their gross monthly income.
Default: is when a debtor fails to make loan repayments as agreed to in a loan contract.
Delinquent/Derogatory accounts: Are accounts classified according to the time period they are past due. Common timeframes are 30, 60, 90 and 120 days past due. They can also include accounts that have been charged off, gone to collections, liens, bankruptcies, or court judgment.
Discharged: is a debt that a court declares no longer needs to be repaid due to bankruptcy. Alimony, child support, liability for willful and malicious conduct and certain student loans cannot be discharged.
Disclosure: is a credit report provided to the consumer which shows the “nature or substance” of what is in their credit records as outlined by the FCRA (Fair Credit Reporting Act).
Dismissed: if a consumer files for bankruptcy, the judge may decide to not allow the consumer to continue with the bankruptcy. If the judge rules against the petition, all debts are reinstated, and the bankruptcy petition is “dismissed”.
Disposition fee: is a charge by a car dealer to defray the cost of preparing and selling the vehicle at the end of a lease if the vehicle is not purchased by the consumer.
Down payment: is the amount paid up front when arranging credit. On a lease the down payment is often called a “capital lost reduction”.
Dumpster Diving: occurs when someone goes through your trash looking for bills, preapproved credit card applications or other mail that contains your personal information. Always shred sensitive material before you dispose of it.
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Economic indicators: are the key statistics in the economy that reveal the direction of the economy; for example, the unemployment rate and the inflation rate.
End–user: is the person or company who is the ultimate recipient of the credit information. Sometimes information passes a number of different processes before reaching the “end user”.
Equal Credit Opportunity Act (ECOA): is part of the Consumer Credit Protection Act, prohibiting creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, and receipt of public assistance.
Escrow: is property or money held by a third party until the agreed upon obligations of a contract are met.
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Fair Credit and Charge Disclosure Act: is part of the Truth In Lending Act that requires the disclosure of all the costs involved in credit card plans that are offered by mail, telephone or applications distributed to the general public.
Fair Credit Billing Act (FCBA): is a federal law that provides a specific error resolution procedure to protect credit card customers from making payments on inaccurate billings.
Fair Credit Reporting Act: a U.S. federal law that gives everyone the right to see their credit report from the three major consumer Credit Reporting Agencies (Equifax, Experian, and TransUnion).
Fair Debt Collection Practices Act (FDCPA): is a federal law prohibiting abusive and unfair debt collection practices.
Federal tax withholding: is the total amount of moneys withheld from your take-home pay for federal taxes.
Federal Trade Commission (FTC): is a federal agency which administers and enforces rules to prevent unfair business practices.
FICA: is the amount withheld from your paycheck for Social Security taxes. You pay half of your FICA tax; your employer pays the other half.
Finance charge: is the amount of interest charged to you by a lender. Finance charges are usually included in the monthly payment total.
Financial aid: is monetary aid to help defer some of the cost barriers that may prevent a person from pursuing a higher education. Assistance is available from a variety of programs funded by federal, state, university, and private sources. These can include: grants, scholarships, loans, and employment opportunities.
Financial institution: is an enterprise like as a bank whose primary business and function is to collect money from the public and invest it in financial assets such as stocks, bonds, and loans to others.
Fixed rate: is an annual percentage interest rate that does not change during the term of the loan.
Flagging an account: refers to identifying an account for a specific purpose or reason and temporarily suspending activity on the account until the problem that caused it to be flagged is resolved.
Foreclosure: is when a debtor fails to meet his obligations to pay back a loan. The lender can take back possession of any property (such as a house) used to secure the repayment for the loan. Foreclosure refers to the lender’s legal action to take possession of the property.
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Generation identifier: is an addition to someone’s name which indicates there are others in the same family with the same name. The generation identifier is added to the end of the name. Examples: John F. Kennedy, Jr., and King Louis XVI.
Grace period: is the period of time before interest begins to accrue on new purchases.
Guarantor: the person ultimately responsible for paying a bill.
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High risk: consumers who have delinquencies, bankruptcies, charge–offs or public record items on their credit report are considered high risk. These are indications to lenders that a consumer has been an irresponsible user of credit and will likely be so in the future. High risk consumers may only be able to get credit with very high interest rates, if at all.
Home equity closing costs: are any costs other than interest added to the home equity loan. Costs can include any appraiser fees, points paid or other misc. fees. Most costs can be paid up front or added to the loan balance.
Home equity interest rate (APR): is the annual percentage rate for the home equity loan.
Home equity line of credit (HELOC): is a mortgage loan that allows the borrower to take multiple advances on the loan proceeds at their discretion, up to an amount that represents a specific percentage of the borrower’s equity in property.
Hypertext Markup Language (HTML): a markup language that allows web developers to manipulate the text and graphics on a web page, typically in collaboration with CSS and JavaScript.
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Income tax rate: is your federal, state, and local income tax rates combined.
Inquiry: there are two types of inquiries. A hard inquiry is when you have applied for credit, which gives a lender permission to pull your credit report. All hard inquiries are available for all credit grantors to review. A soft inquiry is only available for you to see. It does not influence your credit score. This type of inquiry includes your request for your credit report or prescreen inquiries for credit grantors.
Installment debt: is when credit accounts debts are divided into amounts to be paid successively at specified intervals until the debt is paid off.
Installment loans: are loans which are paid at regular times over a specified time period.
Intellectual Property Information: information pertaining to original creations of an individual (i.e. copyright, trademark, patents, etc.)
Interest rates: are the percent, per unit of time, of the total amount borrowed that is charged by a bank or financial institution for the use of their money.
International Revenue Service (IRS): the United States revenue service that collects taxes and applies and regulates the Internal Revenue Code.
Investigative consumer reports: are consumer credit reports that are usually ordered by a prospective employer for sensitive jobs where background checks and security clearances are necessary. The investigative consumer report might contain information obtained from a credit report, but it is more comprehensive than a credit report. It contains subjective material on an individual’s character, habits, and mode of living, obtained through interviewing the associates and neighbors of the person being investigated and reference checking.
Investment rate of return: is the amount you expect to earn on your investments. This is the return you would make if you were to invest your down payment, security deposit or closing costs instead of using it in your purchase or lease of a new car or home.
Involuntary bankruptcy: is a petition filed by certain credit grantors (instead of by the individual or business) to have a debtor judged as bankrupt. If the bankruptcy is granted, it is known as an involuntary bankruptcy.
Issuer: is a company or public sector entity with shares, bonds or other securities listed on a stock exchange.
Item–specific statement: is also known as a “consumer statement”. You have the right to offer an explanation about a specific account or public record item on your credit report. Only one item–specific/consumer statement may be added per item.
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JavaScript: an intricate programming language that is used to create most web content and pages, typically used in collaboration with HTML and CSS. JavaScript is used to perform various functions on websites and can also be used in offline applications (i.e. smart phone applications, desk widgets, PDFs, etc.).
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Late payment: is a delinquent payment; failure to make a loan or debt payment on or before the time agreed.
Lender: is a person or company that offers to lend money to a borrower for a given period of time. The borrower is obligated to repay the loan in installments or a single payment with specified interest.
Lien: a lien is a legal document often given as a security for the payment of a debt and creates a security interest in a property. A lien can also be placed against a consumer for failure to pay the city, county, state, or federal government money that is owed.
Line of credit: a line of credit is similar to a credit card, except you don’t charge purchases. Instead, a person with a line of credit would use checks to make purchases that are drawn on a line of credit rather than an amount on deposit. A line of credit has a maximum amount available just like a credit limit.
Loan origination rate: is the percentage the lending institution charges to cover some of its processing costs in making a loan in addition to the interest it will earn. Example: 1% for a $200,000 home equals $2,000.
Loan payment: is the regular monthly payment you make to your creditor on a loan.
Loan type: a loan type refers to a mortgage, auto, home equity and personal loan. Some important things to consider when choosing a loan are the differences in fees, rates, and tax deductibility of the interest. For example, home equity loans often have higher fees, but usually have lower rates and a tax deduction for interest paid. Personal loans do not have a tax deduction for interest paid, and have a higher interest rate, but often have lower upfront fees.
Low risk: refers to consumers who have paid their bills on time, had their credit accounts for many years, and do not have large outstanding balances. They have proven to lenders that they are responsible, prudent users of credit. Low risk consumers are able to quickly obtain credit at the most favorable interest rates.
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Magnetic Ink Character Recognition: (also known as MICR or MICR line) Industry standards mandate that this type of special magnetic toner be used to print the information at the bottom of a check.
Major purchase: is a purchase for a substantial amount of money, like a car or major appliance or home.
Market value: is how much something is worth in the marketplace today. Market value can change based on supply and demand.
Medicare: is the U.S. government’s program of hospital insurance and voluntary medical insurance for persons aged 65 and over, and for certain disabled persons under 65. A certain amount is withheld from your take–home pay to cover Medicare.
Medium high–risk: is a consumer who may have had delinquencies, charge–offs or public record items, but not as many incidents as high–risk consumers. Medium risk consumers may still receive credit offers but they will typically pay higher interest rates than low risk consumers because of their risk level.
Medium low risk: is a consumer who may have generally exhibited responsible credit behavior but may have one or two delinquencies on their credit report.
Medium risk: is a consumer who may have credit reports with one or more delinquencies, high outstanding debt, or relatively new credit accounts. These consumers are usually able to obtain credit, but at higher interest rates than medium low or low risk consumers.
Mortgage: is a legal written agreement to repay a loan. An agreement that is secured by a mortgage, serves as proof of indebtedness, and states the payment terms. The note states the amount of the debt that the mortgage secures and renders the mortgagor personally responsible for repayment of the debt.
Mortgage loan: is a short–term or long–term use of property or money with the consent of the owner of the property or money. Typically, this type of loan has a repayment schedule and an interest charge.
Most recent date: is the date your account information was most recently updated.
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Net home price: is the selling price of your home after subtracting any sales commissions.
Net house payment: is your house payment minus the value of the tax deduction and principal payment.
Notice of results: if you request an investigation of information on your credit report, you are entitled to receive a “Notice of Results” if your information was updated or deleted. You can request the credit bureau send your corrected information to credit grantors and employers who reviewed your information within a specific period of time. If your investigation does not result in a change to your credit report, the results will not be sent.
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Opt-out: is when a consumer requests the removal of his/her name from future targeted marketing solicitations by direct marketers, banks, and credit reporting agencies. Consumers may opt–out by calling 1–888–5OPTOUT or www.optoutprescreen.com to be removed from the credit reporting agencies lists.
Outstanding debt: is the total amount of debt you owe to your creditors.
Overdue: refers to an outstanding account or bill not paid when due.
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Paid accounts: are the total number of accounts that have been paid satisfactorily within the agreed upon time period or paid after having been previously delinquent.
Past due: is an account showing late payments or payments received after an agreed upon time for settlement.
Payment status: reflects the history of payments on an account, including any delinquencies or late payments occurring over a seven year period. (current account, delinquent 30 days, current was 60 days past due, involuntary repossession, charge off – not paying, etc.).
Permissible purposes: are the criteria defined by the Federal Fair Credit Reporting Act and various state regulators under which a third party may obtain a consumer credit report. Permissible purposes include credit transactions, employment purposes, insurance underwriting, government financial responsibility laws, court orders, subpoenas, written instructions of the consumer or legitimate business needs.
Personal information: is the section on your credit report which includes your name (and any name variations), present and former addresses, Social Security number, date and year of birth, spouse’s name, employers, and personal telephone numbers. This information is reported to the credit bureaus by your, creditors or other sources.
Personal statement: as a consumer, you have the right to add a personal statement that will appear on your credit report. Your personal statement may include a general explanation about the information on your report.
Petition: is when a consumer files for bankruptcy, but a judge has not yet ruled that it can proceed, the process is known as a bankruptcy petition.
PITI percent of annual income: is the percent of your annual income the financial institution will allow you to use for your “Principal, Interest, Tax and Insurance” payment for your home.
Pre–approved credit card: are pre–approved letters mailed to your home because you meet the risk criteria of the company making the offer. A pre–approved offer is not guaranteed, you may still be turned down when you apply.
Pre–screen: is a process where lenders review a consumer’s credit information for a guaranteed credit offer, similar to pre–approved.
Principal: refers to the amount of debt, not including interest. It is the face value of a note, mortgage, etc.
Principal payment: is the total of principal paid per month on your mortgage.
Property tax rate: is the rate at which your property will be taxed per year. Example: 1% for a $200,000 home equals $200 per year in property taxes.
Public record Information: on a consumer credit report this information is limited to tax liens, lawsuits and judgments that relate to the consumer’s debt obligations.
Purchase price: is the amount, before taxes, fees and closing costs that you pay for an item like a home or automobile.
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Rate cap: is the maximum amount that the interest rate on an adjustable rate mortgage can rise in a single year.
Real estate secured debt: is a debt that has been used to buy a home or has been secured by your home. Example: a home equity loan can be a real estate secured debt.
Released: this term refers to a lien that has been satisfied and is no longer in effect.
Repossession: is when a borrower is significantly behind on payments, a creditor will take possession of personal property pledged as collateral on a loan to pay off the remaining loan amount.
Request an investigation: you can request an investigation of information in your credit report if you believe the information is inaccurate. Credit reporting agencies will request the sources of the information check their records for accuracy at no cost to you. Inaccurate information will be corrected and information that cannot be verified will be deleted within 30 days. Accurate information will not be removed from your credit report. When the investigation is complete, the credit reporting agency will send you the results and a revised copy.
Residual percent: is the remaining value of the property you’re leasing at the end of the lease term. The higher this amount, the lower your lease payment will be.
Retail card: is a plastic payment card issued by a specific retailer or group of retailers for limited use at their own outlets.
Revolving account: is a credit account with a predetermined maximum limit as long as a customer makes regular payments. In a revolving account your monthly payments due are usually based on your average daily balance.
Revolving debt: refers to debt owned on an account that the borrower can repeatedly use and pay back without having to reapply every time credit is used. Credit cards are the most common type of revolving debt.
Risk level: lenders compare consumers with similar credit histories in order to assist in determining credit risks. This allows lenders to compare “apples to apples” and ensure that your credit behavior is judged in a context that is relevant and fair.
Risk score models: is a tool used by credit grantors to predict the future payment behavior of consumers.
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Sales price: is the total price for an item, including taxes and fees.
Sales tax: is the total amount of sales tax on a purchase.
Sales tax rate: is the percentage of sales tax charged on a purchase. Sales tax for buying is charged on the total sales amount. In the case of a lease, sales tax is only due on the amount of the lease and is added to each lease payment.
Satisfactory accounts: are accounts that are current or have been paid satisfactorily.
Satisfied: is when a judgement has been paid in full by the consumer.
Scheduled payment: is a payment due at a scheduled time.
Score factors: are elements from your credit report that determine your credit score and can have a positive or negative affect on your credit score. For example, your total debt, types of accounts, number of late payments and age of accounts are what determine your credit score.
Secured credit: is a loan for which some form of acceptable collateral, such as a house, car or deposit has been pledged.
Security: is real or personal property that a borrower pledges as collateral for the term of a loan. If the borrower fails to repay the loan, the creditor may take ownership of the secured property by following legal procedures.
Security alert: is a statement added to a credit report when a credit bureau is notified that the consumer may be a victim of fraud. A Security Alert remains on a file for 90 days and suggests that creditors should request proof of identification before granting credit in that person’s name. Once a security alert has been added to your credit report, your report will no longer be available for online viewing, however; you can still receive your report through the mail.
Security interest: is the creditor’s right to take property or a portion of property offered as security (collateral) for a loan.
Service charge: is a part of some finance charges, such as the fee for overdrawing your checking account.
Settlement costs: are fees paid to a lender and mortgage broker, and certain other fees paid to third parties for services that the lender requires the borrower to purchase. Additional settlement costs include payments to third parties, which lenders do not control and for which they cannot ordinarily provide accurate information until later in the origination process.
Social Security Number: a unique nine-digit number used to identify individuals for Social Security purposes.
Statement: is a bill summarizing all of the activity on an account within a specified period of time. A credit card statement is the monthly bill from a credit card issuer that describes and summarizes the activity on an account. Most credit card statements include the outstanding balance, purchases, payments, credits, finance charges and other transactions for the month.
Statement date: is the date on which a statement is created, and the date used to calculate finance charges (interest) for the statement period.
State tax withholding: is the total amount withheld for state taxes.
Surcharge: is also known as a convenience fee and is an extra fee for using a service. Surcharges are commonly charged when using ATM machines.
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Taxable fees: is any fee that is subject to sales tax. When buying a home, this typically includes title transfer fees.
Tax savings: are items that lower your taxable income. Tax savings also refers to the value of the tax deduction you receive by deducting interest payments to your mortgage and home property taxes.
Term: is the length of time you have to pay back a loan.
Term in months: is the number of months you have to pay back a loan.
Term in years: is the number of years you have to pay back a loan.
Thin file: refers to a credit report that has few if any credit accounts or inquiry history. Young adults, recent college grads and people new to this country will typically have thin files until they begin to establish credit.
Third-party collectors: are typically collection agencies who are under contract to collect debts for a credit department or credit company.
Total closing costs: are the total upfront costs paid before your loan can be issued. It is the sum of the loan origination fee, amount paid for points and any additional closing costs.
Total debt percent of annual income: is the percentage of your annual income your financial institution will usually allow you to use for installment payment debt. Installment debt includes car payments, credit card payments, other loan payments and your “Principal, Interest, Tax and Insurance” payment for your home.
Total down payment: is the amount used as a down payment to be paid up front, rather than financed. In a car purchase, your down payment will be your cash available plus your trade-in, less any outstanding loan balance on your trade–in. In a home purchase, your down payment will be your available cash after closing costs.
Total interest: is the sum of all interest paid.
Total payments: are the total of all monthly payments over the term of the loan. This total payment amount assumes that there are no prepayments of principal.
Trade allowance: is the total dollar amount given on your trade–in vehicle during a vehicle purchase.
Trade line: each specific credit relationship with a business is tracked over time as a trade line on your credit report. This means that you can have multiple accounts with the same bank, but your payment history will be identified separately for each account. Trade line information on your credit report includes company, date account was opened, credit limit, type of account, balance owed and payment profile.
Truth in Lending Act: is Title I of the Consumer Protection Act. It requires that most categories of lenders disclose the annual interest rate, the total dollar cost and other terms of loans and credit sales.
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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Unsecured credit: is credit for which no collateral has been pledged. Loans made under this arrangement are sometimes called signature loans. The loan is granted based solely on a customer’s written agreement that the loan amount will be paid.
Upfront costs: are any fees you are required to pay in advance before you receive a loan. This could include appraisal fees, loan origination fees and document preparation fees, etc.
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A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Variable rate: is a loan that allows for an interest rate that may fluctuate over the life of the loan. The rate is often tied to an index that reflects changes in market rates of interest. A fluctuation in the rate causes changes in either the payments or the length of the loan term. Limits are often placed on the degree to which the interest rate or the payments can vary.
Verification: is the process of checking the accuracy of information on a credit report. Credit grantors or employers may use your credit report information to verify your application information is correct or you may verify your own credit information in case of inaccuracy.
Victim statement: is a statement added to a consumer’s credit report to alert credit grantors that the consumer’s identification has been used fraudulently to obtain credit. The statement requests the credit grantor verbally contact the consumer by telephone before issuing credit. It remains on file for seven years unless the consumer requests to have it removed.
Frequently Asked Questions
Have a question about your account or protection services? View the answers to our frequently asked questions!