Loan
A transfer or delivery of money from one party to another with the express or implied agreement that the sum will be repaid regardless of contingency and usually with interest.
Bridge Loan
A short-term loan used as a means of financing a purchase or enterprise prior to obtaining other funds.
Social Security Number (U.S.)
Personal identification number often utilized in identity theft because it is used by many agencies and institutions to verify identity.
Conventional Loan
A loan for the purchase of real property that is secured by a first mortgage on the property rather than by any federal agency.
How to Improve Your Credit Rating
Some methods include maintaining a good payment history, controlling your debt, having longevity in your home and job (at least 2 years), minimizing credit inquiries, keeping credit cards you don't use, and more.
Demand Loan
A loan that is subject to repayment upon demand of the lender.
Home Equity Loan
A loan or line of credit secured by the equity in one's home called also equity loan home equity line home equity line of credit.
Credit Bureau Opt-out Options
The national credit bureaus offer a toll-free number that enables consumers to opt-out of all pre-approved credit offers with just one phone call. Call 1-888-5-OPTOUT (1-888-567-8688) for more information.
Loan for Consumption
A loan in which the borrower is obligated to return property of the same kind as that borrowed and consumed - used chiefly in the civil law of Louisiana (U.S.).
Loan for Use
A loan in which one party lends personal property to another with the understanding that the borrower will return the same property at a future time without compensation for its use.
Credit Card System
A type of retail transaction settlement and credit system, named after the small plastic card issued to system users. A credit card is different from a debit card in that the credit card issuer lends the consumer money rather than having the money removed from an account.
Participation Loan
A single loan in which two or more lenders participate.
Term Loan
A loan extended to a business with provisions for repayment according to a schedule of amortization and usually for a period of one to five years and sometimes fifteen years.
State Credit Reporting Laws
Individual U.S. states may have laws in addition to the Federal credit laws.
Lender
One who lends, especially money.
SSN That Will Never Be Allocated
1) Numbers with all zeros in any of the 3 groups
2) Numbers beginning with 666
3) Numbers from 987-65-4320 to 987-65-4329 are reserved for advertising use.
Lend
To give something (e.g., money) to somebody (the borrower) for using it, expecting to get it back.
Borrower
Someone who receives something (e.g., loaned money) on the promise to return it or its equivalent to the lender.
Slow Credit
Office of Thrift Supervision regulations define slow consumer credit as closed-end consumer credit accounts 90 to 119 days delinquent, and open-end consumer credit accounts delinquent 90 to 179 days.
Interest
A supplemental charge for a loan, usually a percentage of the amount loaned.
Money
Any marketable good or token used by a society as a store of value, a medium of exchange, and a unit of account.
Currency
A unit of exchange, facilitating the transfer of goods and services. It is a form of money, where money is defined as a medium of exchange.
Payday or Pay Day
The day on which employees' salaries or wages are paid.
Debt
That which is owed to someone else, such as money.
SSN as De Facto Identification
SSN is generally required by financial institutions to set up bank accounts, credit cards, and obtain loans, partially because it is assumed that no one except the person to whom it was issued will have it. This assumption facilitates identity theft.
Debtor
A person or company owing debt (such as a cash loan).
Loan Default
A condition that occurs when a debtor has not met the legal obligations according to the debt contract, e.g. it has not made a scheduled loan payment, or violated a condition of the debt agreement.
Payday
The day on which you receive pay for your work.
Standard of Deferred Payment
The accepted way (in a given market) to settle a debt. Since 2003, the US dollar or Euro are the most generally accepted standards for international debt settlements.
Obtaining Your Own Credit Report
In the USA, the Fair Credit Reporting Act entitles every taxpayer to one free personal credit report per year and per agency. The following website has been set up for this: www.annualcreditreport.com
Mortgage
A method of using property as security for the payment of a debt, generally associated with loans secured on real estate.
Revolving Credit Card or Account
A credit card or credit account while allows the user to carry a balance (a revolving balance) each month by paying a minimum amount. This flexibility comes at the cost of interest charged by the credit card companies.
Credit Reporting Agencies (U.S.)
Experian, TransUnion, Equifax.
Payday Loan Definition
The loan is typically given in cash and secured by the borrower's post-dated check that includes the original loan principal plus accumulated interest.
Payday Loan Maturity Date
the date that the lender withdraws the borrower's check from his or her checking account.
Car loan
A personal loan to purchase an automobile, also called automobile loan or auto loan.
Common Payday Loan Scenario
Borrower seeks a payday loan for $100 for up to 14 days, and writes a post-dated personal check for $115. Payday lender holds the check (without cashing it) until borrower's next payday. At that time, the borrower can redeem the check by paying $115 in cash, or can refinance (roll-over) the check by paying a fee to extend the loan for another two weeks. If the payday loan is not refinanced by the borrower, the lender deposits the borrower's original check for $115 ($100 + $15 interest).
Payday Loan Controversy
Some criticize payday lenders as targeting the young and the poor, and those who may not understand the time value of money (interest).
Valid SSN
Cannot have the first three digits (the area number) above 772, the highest area number which the Social Security Administration has allocated.
Loan Shark
A person or entity offering illegal unsecured loans at high interest rates to persons needing cash quickly. Such loans often include threats of violence or blackmail if prompt repayment is not made. Payday loans and other consumer finance instruments have made true loan sharks rarer.
Usury
Originally defined as charging a fee for the use of money (e.g., loan interest). Today the word refers to a lender charging unreasonable or extremely high rates of interest.
Unsecured Loan
A loan not guaranteed or protected as to payment, performance, or satisfaction by a security interest or by property given or pledged as security.
Charge Cards
Often used to incorrectly describe credit cards, are cards that do not extend the user credit but instead require that the charges be paid in full each month in full.
Collateral
Property acceptable as security for a loan or other obligation.
Credit Rating
A grading of a borrower's ability to meet financial obligations in a timely manner. Credit ratings are set by lenders and by independent agents for companies, individuals, and specific debt issues.
Secured Credit Card
a type of credit card in which you must first put down a deposit between 100% and 200% of the total amount of credit you desire. This minimizes credit card company risk for bad credit customers.
Time Value of Money - TVM
Also called the discounted present value, is based on the premise that one will prefer to receive a certain amount of money today than the same amount in the future, all else being equal. Refers to effects of interest over time.
Credit Report Time Limits
The Fair Credit Reporting Act allows credit agencies to list negative credit and public record information for 7 years from the date of delinquency, or for 10 years from the date of filing Chapter 7, 11, 12, or 13 bankruptcy.
Interest Rate
The percentage of a sum of money charged for its use, also called rate of interest.
Simple Interest
Interest that accrues linearly, growing by a certain fraction of the principal over equally-spaced time periods for the life of the loan.
Free Credit Reports
Free credit reports are available in all states as of September 1, 2005. The Fair Credit Reporting Act entitles every taxpayer to one free personal credit report per year and per agency.
Compound Interest
Interest which is regularly added to the debt (called compounding) and is calculated over the principal PLUS over the interest already accrued to the debt (over the total amount owed).
Compounding
To compute interest on the principal and accrued interest together, rather than on the principal alone.
Consumer Reporting Agencies
Have a number of responsibilities including the providing a consumer with information about him or her in the agency's files and to take steps to verify the accuracy of information disputed by a consumer
Bank
An institution that provides financial services, especially taking deposits and extending credit (e.g., loans).
Bankruptcy
A legally-declared inability or decreased ability of an person or company to pay their creditors.
Social Security Number
The SSN is a nine-digit number in a 3-part format: nnn-nn-nnnn. Part 1 is assigned by the geographical region, part 2 is a group number (01 to 99), and part 3 is a serial number (0001-9999).
Creditor
A party or lender (e.g. person, company, bank, etc.) that claims that a second party (borrower) owes the first party some property or service.
Maturity date
In a payday loan, this date usually coincides with the borrower's next payday.
Debit Card
A card which physically resembles a credit card and is used as an alternative to cash when making purchases. When purchases are made with a debit card, the funds are withdrawn directly from the purchaser's checking or savings account at a bank.
Default
Failure to perform a task or fulfill an obligation, especially failure to meet a financial obligation.
Personal Check
a written order to a bank to pay the amount specified from previously-deposited funds.
Credit (financial definition)
When used in terms such as credit card, refers to the granting of a loan and the creation of debt.
Fair Credit Reporting Act (FCRA)
An American federal law regulating the collection, dissemination, and use of consumer credit information.
Credit Score Purpose
A
Attempts to quantify the likelihood that a prospective borrower will fail to repay a loan or other credit obligation satisfactorily.
Credit History
Same as credit report.
Credit Remaining
The positive balance or amount remaining in a person's account.
Credit History or Credit Report
A record of an individual's or company's historical borrowing and repaying habits, including information about late payments and bankruptcy.
Installment Credit
A type of credit that has a fixed number of payments, in contrast to revolving credit.
Equifax
A U.S. credit reporting agency. Contact: Equifax, P.O. Box 740241, Atlanta, GA 30374-0241.
Personal Identification Number (PIN)
A numeric value used in certain systems as passwords to gain access, and authenticate.
Credit Dispute
The right of U.S. consumers to challenge the accuracy of information in their credit reports at no cost to the consumer.
Free Credit Report Tip
Consumers are entitled to reports from all three major agencies at once but it is possible to request one at a time. Staggering the reports every four months allows the consumer to continue monitoring their credit throughout the year.
Credit Rating
An estimate of the amount of credit that can be extended to a company or person without undue risk to the lender.
Credit Score Definition
A number that represents an estimate of an individual's financial creditworthiness as calculated statistically.
Credit Dispute Letter
A letter from an individual to a credit agency disputing the accuracy of information on the individual's credit report.
TransUnion
A U.S. credit reporting agency. Contact: TransUnion, P.O. Box 1000, Chester, PA 19022.
Credit
Is the risk of loss due to a party (such as a borrower) defaulting on a loan, or more generally the risk of loss due to some credit event.
Collection Agency
A business hired to pursue and collect payments on debts owed by individuals or businesses.
Intimidation Tactics
Used by unscrupulous collection agencies to scare debtors into paying alleged debts.
Consumer Reporting Agencies
Companies that collect and report credit information about consumers to be used for credit evaluation and other purposes.
Identity Theft or Identity Fraud
The deliberate assumption of another person's identity, usually to gain access to their finances or frame them for a crime.
Cash Advance
Can also mean cash provided against a prearranged line of credit, e.g., a credit card.
Experian
A U.S. credit reporting agency. Contact: Experian, P.O. Box 9595, Allen, TX 75013
Credit Definition
The ability to borrow funds.
Credit Bureau
Another name for a credit reporting agency.
Equity Loan
A mortgage placed on real estate in exchange for cash to the borrower.
SSN
Acronym for Social Security number (U.S.).
Credit History Opt-out Options
Visit http://www.ftc.gov/privacy/protect.htm#Credit
Revolving Credit
A type of credit that does not have a fixed number of payments, in contrast to installment credit.
How to Restrict Companies From Accessing Your Credit History
a consumer may elect to have the consumer's name and address excluded from any list provided by a consumer reporting agency in connection with a credit or insurance transaction that is not initiated by the consumer (such as pre-approved credit card solicitations), by notifying the agency that the consumer does not consent to any use of a consumer report relating to the consumer in connection with any credit or insurance transaction that is not initiated by the consumer.
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