Credit: Definitions

Relevant to Credit Cards, Mortgages, Lines of Credits, Car Loans and Other Forms of Credit (Page 1 of 3)

Definitions of credit and credit-related words that are relevant to credit cards, home equity lines of credit and mortgages:



Annual Percentage Rate (APR)
The interest rate expressed as a yearly rate. It includes the total amount financed, the finance charges, and the term of the loan and is usually different than the interest rate.
Appraisal Fee
The fee an appraiser charges to estimate the current market value of property offered. Especially relevant to home mortgages and home equity lines of credit.
Asset
Item of value that is owned and has commerical or exchange value. Assets include Assets include real property, personal property, bank accounts, stocks, mutual funds and many other things.
Automated Teller Machines (ATMs)
Electronic terminals that allow customers of financial institutions to make deposits, withdrawl cash, get account balances and perform other transactions just as they would through a bank teller.
Balloon Payment
A large final payment charged at the end of a loan or lease that usually extinguishes the debt.
Billing Error
Any mistake in your monthly statement as defined by the Fair Credit Billing Act.
Business Days
Counts the days that business is normally conducted in order to exclude weekends and holidays from a timeline. Check with your institution to find out what days it counts as business days under the Truth in Lending and Electronic Fund Transfer Acts.
Collateral
Assets that secure a loan and are subject to seizure if you default.
Co-signer
Another person who signs your loan agreement and assumes equal responsibility and liability for repaying it. If you are asked to be a co-signer, you will be equally responsible for repaying the loan or debt. (sometimes spelled "cosigner")
Credit
The promise to pay for goods or services later in order to buy or borrow in the present; a sum of money due a person or business.
Credit Bureau
An agency that keeps credit and collection data about consumers. Their information is released to prospective lenders who are making decisions on extending credit. The three major credit bureaus in the US are Equifax, Experian and TransUnion. Also referred to as "credit reporting agencies."
Credit Card
A bank-issued card that allows a consumer to purchase goods or services using a line a credit. A credit card authorizes payment for purchases and comes with a credit limit. Interest is charged on the outstanding balance. The credit limit, interest rate and possible other terms are determined by the bank issuing the card and are based on the card-holder's income and credit history as reported by a credit report.


Credit Definitions:   1    2    3