Credit Glossary

Credit Terminology
The credit world is beset with jargon, consumers do not understand.
We are dedicated to helping you understand how to repair your credit in the most efficient, convenient manner. To demonstrate our dedication, we have provided a list of valuable credit terms you are likely to encounter while repairing your credit.

Credit History: Tracks all loan and credit card accounts as you borrow and pay back money.

Credit Rating: calculated worthiness of an individual or company

Debt: Debt is money owed and the arrangement to pay the money back.

Creditor: A creditor is also known as a lender and fronts the money for your loan.

Debtor: A debtor is also knows as a borrower and has entered into a loan agreement with a lender.

Interest: Interest is the percentage or rate at which the original amount borrowed will increase upon paying the lender back.

Asset: An asset is a financial resource, something that produces value

Bankruptcy: The legal declaration of the inability to pay a debt.

FICO: FICO is the formula /calculation which lenders use to evaluate a borrowers risk. Fico is just one scoring system to determine credibility.

Liquidation: Liquidation is the process of converting assets into cash to pay off creditors.

Repossession: If a borrower fails to pay a debt, the purchased item can be taken back from the borrower.

Annual Percentage Rate (APR): APR is the yearly rate lenders charge borrowers while the debt is outstanding.

Amortization: Evidence debt is decreasing by regular payments of principal and interest.

Minimum payment: The lowest amount required to pay monthly on a credit card in order to keep it in good standing.

Credit Line: The maximum amount of money that can be charged to a credit card.