Bankrate's financial glossary
Did you run across an unfamiliar term when applying for a mortgage, credit card
or auto loan? Find the meaning here, along with definitions of other financial words
and phrases, in Bankrate.com's financial glossary.
Credit report and credit score terms
A complex mathematical model. In credit scoring, it is used to compare data in millions of credit reports and predict a person's likelihood to repay debts.
Regulates monetary policy for a nation, such as the Federal Reserve Bank does in the United States, or a group of nations, such as the European Central Bank. Typical functions include issuing currency, adjusting interest rates to control the supply of credit, regulating banks, and ensuring smooth functioning of financial markets.
A reorganization bankruptcy, usually involving a corporation or partnership. (A Chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in Chapter 11.)
The chapter of the Bankruptcy Code providing for liquidation -- the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.
An unpaid portion of a bill that a lender has accepted will never be paid and has recorded on the books as a bad debt. It is a serious negative item on a credit report.
A creditor's attempt to recover a past-due payment by turning the account over to a collection department or company. Having a debt in collection is a serious negative item on a credit report.
Consumer Credit Counseling Service
A service that offers counseling about how to work out a realistic budget and debt repayment plan and work with creditors. The goal is to ensure that debts are paid back over time.
Consumer Credit Protection Act
The Consumer Credit Protection Act, passed in 1968, for the first time spelled out basic consumer protections, including Truth in Lending disclosures. It requires creditors to state the cost of borrowing in understandable terms to allow consumers to figure out how much loans would cost, and to compare them.
Debts incurred for personal, as opposed to business, needs.
A company that collects and sells information about how people handle credit. It issues credit reports that list how individuals manage their debts and make payments, how much untapped credit they have available and whether they have applied for any loans. The reports are made available to individuals and to creditors who profess to have a legitimate need for the information. The three major national credit bureaus are Equifax, Experian (formerly TRW) and TransUnion. Often called credit reporting agency.