Consumer Credit

Consumer Credit terms

1. "Blue Book" Price the price of a used car as measured by a quality index of many similar vehicles.
2. "Go-to" rate Interest rate you are charged after the introductory rate.
3. Address on file Your address on file is the address that you provided on your application to open this credit card account, unless (1) we have received and processed your…
4. Adjustable Rate Loans (also known as variable-rate loans), usually offer a lower initial interest rate than fixed-rate loans.
5. Advance Fee Loan Scam A form of fraud in which consumers are asked to pay a fee up front and receive a quick loan of a large size with a very low APR.
6. Affinity card A card that offers rewards that benefit groups and organizations.
7. Annual fee A yearly fee that may be charged for having a credit card. Some card issuers assess the fee in monthly installments.
8. Annual Percentage Rate (APR) (APR) The cost of credit on a yearly basis, expressed as a percentage.
9. Application Fee A fee charged when you apply for a credit card.
10. Appraisal The act of evaluating and setting the value of a specific piece of personal or real property.
11. Assign We assign your credit card contract if we sell or pass to a third party any or all of our rights or obligations under the contract, including any amount…
12. Authorized charge An authorized charge is any charge that you or any authorized user makes on the account, and any fees and interest charges owing on the account.
13. Authorized user If you ask us to issue a credit card on this account to another person, he or she is an authorized user.
14. Average daily balance method with compounding According to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “average…
15. Average daily balance method without compounding According to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “average…
16. Balance We put each charge on your account, including interest or fees, into a balance category.
17. Balance transfer The process of moving an outstanding balance from one credit card to another. This is usually done to obtain a lower interest rate on the outstanding…
18. Balance-transfer fee A fee charged when you make a balance transfer. It may be a flat fee or a percentage of the transfer.
19. Balloon Payment A mortgage with periodic installments of principal and interest that do not fully amortize the loan.
20. Bill Your bill is the statement of your account. Your bill will tell you the total amount that you owe us as of the end of the last billing period.
21. Billing period The billing period is the fixed period of time covered by the bill we send you.
22. Buy Down When you make an up-front cash payment to reduce your monthly payments on a mortgage loan, it's called a buy down.
23. Buy Here, Pay Here Financing is usually associated with used car dealers. Installment payments, often made weekly, are paid directly to the dealership, which provides private…
24. Buyer's Agent A buyer's agent represents a buyer in a real estate transaction, negotiating with the seller's agent for a lower price or a contract with more favorable…
25. Cap A cap is a ceiling, or the highest level to which something can go. For example, an interest rate cap limits the amount by which an interest rate can be…
26. CARD Your card is the physical card, the account number, or any device (including a check) that can be used to access your credit card account.
27. Cash advance You receive a cash advance when you use your card or account to do any of the following: obtain cash from an automated teller machine (ATM); or obtain…
28. Cash-advance fee A fee charged when you use a credit card for a cash advance, such as withdrawing cash from an ATM.
29. Closing Costs or Settlement Fees Fees paid to effect the closing of a mortgage. (Such as points, title fees, survey fees, etc.)
30. Closing or Settlement The meeting between the seller, buyer and closing attorney when the property legally changes hands, the transaction is legally closed, or both.
31. Closing Statement or Settlement Statement This is a document prepared by the Title Company that details the final and specific costs involved for both the buyer and seller in a real estate…
32. Collateral Assets that are offered to secure a loan or other credit. For example, if you get a real estate mortgage, the bank's collateral is typically your house.
33. Combined Loan-to-Value (CLTV) (CLTV) The relationship of the outstanding balances of a first and second mortgage to the value of the home used to determine the maximum percentage of value…
34. Commitment An offer to grant a mortgage loan which outlines the terms, the amount of the loan, the interest rate and any conditions that the commitment or approval…
35. Conforming Loan A loan which meets all requirements to be eligible for purchase or securitization by FNMA or FHLMC (Fannie Mae or Freddie Mac) which has a loan amount…
36. Construction Loan A short-term, interim loan that provides disbursements to facilitate the construction of a home. Funds are disbursed at intervals as work progresses.
37. Consumer Any natural person obligated or allegedly obligated to pay a debt incurred for personal, family or household use.
38. Consummation The point in time when the contractual relationship between borrower and lender begins.
39. Conventional Mortgage A mortgage loan which is not insured or guaranteed by a government agency such as FHA or VA.
40. Cosigner Another person, not necessarily a relative, who also signs your loan contract and assumes equal responsibility for its repayment.
41. Credit Bureau An agency that collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans.
42. Credit Bureaus or “consumer reporting agencies,” are companies that compile credit reports, and supply credit information to businesses upon request.
43. Credit Card A plastic card with a magnetic stripe that is used from time to time or over and over again to borrow money or buy goods or services on credit, and which…
44. Credit card agreement A document that outlines the terms and conditions for using your credit card. It is your contract with your credit card company.
45. Credit counseling service A service that employs credit counselors who will look at your financial situation and help develop repayment options.
46. Credit History A record of an individual’s or company’s past borrowing and repaying behavior maintained by an independent credit reporting agency.
47. Credit Life & Disability Insurance Insurance offered to loan and credit card customers that will pay the monthly payments on their debt if they become disabled or the balance of their debt…
48. Credit limit The maximum amount of credit that is available on a credit card or other line of credit account.
49. Credit Pre-Approval A process in which an individual can apply for a credit approval decision before he/she actually finds a home and enters into a Purchase and Sales…
50. Credit Report A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness.
51. Credit reporting agency See credit bureau.
52. Credit Reports or “consumer reports,” contain information about your credit worthiness. Information is kept on file with a credit bureau and will display data about…
53. Credit Score A number, roughly between 300 and 800, that measures an individual's credit worthiness. The most well-known type of credit score is the FICO® score.
54. Credit Service Organization also known as a loan/mortgage broker. Starting in late September 2005 all Credit Service Organizations will be renamed loan brokers; see loan broker.
55. Credit-limit-increase fee A fee charged if you ask for and receive an increase in your credit limit.
56. Cure To bring your credit account current by paying all past due accounts.
57. Daily balance method with compounding According to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “daily…
58. Daily balance method without compounding According to this method, we calculate the interest charges for each balance by applying the “daily periodic rate” for that balance to the “daily…
59. Daily periodic rate (DPR) (DPR) DPR stands for “Daily Periodic Rate.” This is a daily interest rate. The daily periodic rate or DPR for a given balance is equal to the APR on that…
60. Debit Card A debit card allows the account owner to access their funds electronically. Debit cards may be used to obtain cash from automated teller machines or…
61. Debt cancellation coverage Cancels your debt if you become unemployed, disabled, or meet other criteria covered by your contract.
62. Debt suspension coverage Stops your payments during periods of unemployment, disability, or other situations covered by your contract.
63. Debt-to-Income Ratio A measure of creditworthiness computed by dividing the dollar amount of monthly debts by total gross monthly income, then converting the result to a…
64. Deed A deed is a written document that transfers ownership of land or other real estate from the owner, also known as the grantor, to the buyer, or grantee.
65. Default Default occurs when a debtor is unable to meet the legal obligation of debt repayment, one form of which is the failure to promptly pay interest or…
66. Default APR See penalty APR.
67. Department of Veterans Affairs (VA) (VA) VA will insure certain government mortgages that are provided to Veterans of the U.S.
68. Disclosures Certain information that Federal and State laws require creditors to give to borrowers relative to the terms of the credit extended.
69. Discount Points Amount paid to the lender by the borrower or seller to decrease or "buy down" the borrower's interest rate.
70. Divorce Decree legal ruling by a court which, among other things, assigns obligations for the payment of various debts.
71. Due date The due date is the date by which we must receive your payment in order for it to be on time. Your bill lists the due date.
72. Equity Another word for "stock." It represents an ownership interest by shareholders in a corporation.
73. Escrow Account An account that serves a specific purpose, which ends when a certain condition is met or a certain event occurs.
74. Everyday debit card transactions Purchases made with your debit card on a day-to-day basis (excludes all checks and automatic bill payments)
75. Fair Collection Practices Act A federal law supplemented by Maine law, which gives rules and regulations governing debt collectors. Federal Law: 15 U.S.C.§ 1601 et seq.
76. Fair Credit Reporting Act (FCRA) (FCRA) A Federal law, established in 1971 and revised in 1997, that gives consumers the right to see their credit records and correct any mistakes.
77. Federal Housing Authority (FHA) (FHA) Also known as HUD (Department of Housing and Urban Development). The Federal Housing Authority is a federal entity that governs the FHA mortgage program…
78. Finance Charge The total cost of credit a customer must pay on a consumer loan, including interest. The Truth in Lending Act requires disclosure of the finance charge.
79. Fixed Rate Mortgage A mortgage with payments that remain the same throughout the life of the loan because the interest rate and other terms are fixed and do not change.
80. Fixed-rate APR An APR set at a certain percent that cannot change during the period of time outlined in your credit card agreement.
81. Floating The process of an applicant deciding against locking-in an interest rate at the time of application and instead electing to float with the market until a…
82. For Sale By Owner (FSBO) (FSBO) Indicative of a real estate transaction in which the seller is not represented by a real estate broker.
83. Foreign currency transaction A foreign currency transaction is a purchase and/or cash advance that you make in a foreign currency, i.e. not U.S. dollars.
84. Grace Period A time period after the due date that you may pay a premium without penalty. The policy remains in force during this time.
85. Hazard Insurance/Homeowners Insurance Insurance coverage that provides compensation to the insured in case of property loss or damage.
86. Home Equity Loan A home equity loan allows you to tap into your home's built-up equity, which is the difference between the amount that your home could be sold for and the…
87. Home Inspector You hire and pay for this individual to analyze the home's physical condition before you buy it.
88. Identity Theft Identity theft is the unauthorized use of your personal information, such as your name, address, Social Security number, or credit account information.
89. Index Statistical measure of the state of the stock market or economy based on the performance of stocks or other components.
90. Interest The term interest is used to describe the cost of using money, a right, share, or title in property.
91. Interest rate The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time.
92. Interest-free period The number of days you have to pay your bill in full before an interest charge is assessed on purchases.
93. Introductory APR The APR charged during the credit card's introductory period after a credit card account is opened.
94. Investor Any person or institution that invests in mortgages or mortgage-backed securities.
95. Jumbo A loan that exceeds the statutory size limit eligible for purchase or securitization by either FNMA or FHLMC.
96. Late payment A late payment is your failure to make at least the minimum payment so that it reaches us by or before the time and due date on your bill.
97. Late-payment fee A fee charged if your payment is received after the due date.
98. Liable Responsible or answerable by law; legally obligated.
99. Listing Broker This is the real estate broker that represents the sellers. They will market the property to bring buyers, which in turn bring offers to the seller.
100. Loan Origination Fees Fees charged by the lender for processing the loan and which are often expressed as a percentage of the loan amount.