Glossary of Terms
Source: Equifax UK
A | B | C | D | E | G | H | I | L | M | N | O | P | R | S | T | V
A
Account Review
A review of a consumer's credit history by one his/her creditors
Adjudication
If you cannot meet liabilities and are made bankrupt either by self-petition or by the petition of the creditors, a judge will decide you are bankrupt and your affairs will pass under the control of a Trustee.
Administration Order
This is a term applied to an order made by the court in cases of small bankruptcies. If your liabilities do not exceed £5,000, the court can make an Administration Order for the payment of debts by instalments based on certain conditions.
Annual Fee
The yearly fee charged by a lender to maintain an account
Annual Percentage Rate (APR)
The cost of credit at a yearly rate. Knowing the APR allows you to effectively compare loans, even when they are structured differently.
Asset
Any holding that has a monetary value or use. Houses, real estate, cars, jewellery, and stocks & bonds are considered assets.
Attachment
A legal process whereby a creditor has obtained judgment on a debt allowing him to receive full or partial payment by taking legal possession of a portion of the debtor's assets (wages, bank account, etc.)
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B
Bankruptcy Order
An Order issued from the courts once the courts have decided to accept a petition declaring that the debtor is insolvent or unable to repay debts.
C
County Court Judgment
A decision or judgment from a County Court against a debtor who has refused or failed to pay monies for which a creditor claimed to be owed and is suing.
Consumer Credit License
A License issued by the Office of Fair Trading issued to those businesses operating in the consumer credit industry. The licenses are issued under the The Consumer Credit Act as part of the rules for the granting and enforcement of credit and to protect those who purchase goods or services on credit terms, or who seek loans.
Certificate of Unenforceability
Applicable in Northern Ireland, a judgment has been filed with the court against the debtor but the court has issued a certificate for the debtor's protection which prevents collection of the debt. This certificate is issued as part of a bankruptcy action. After six months, the creditor may reapply to have the debt paid.
CIFAS
CIFAS is a system for preventing fraud. It allows member organisations to exchange details of applications for products or services, which are believed to be fraudulent, because the information provided by the applicant fails verification checks. When a CIFAS member organisation identifies a fraud, a warning is placed against the address or addresses linked to the application or account. The warning shows the name used on the application or account but this does not mean the person named is involved in the fraud, as fraudsters tend to use a variety of names, some false and some genuine. CIFAS does not provide a credit reference database.
Collateral
Assets acceptable as security for a loan or other obligation
Consumer Debt
Debt incurred for items that aren't considered tangible investments such as credit card debt, car loans, and personal loans made by family members
Credit
A trust or promise to buy now and pay later under designated terms for goods or services
Credit Bureau/Credit Reference Agency
An agency that gathers information about consumers' credit relationships and provides creditors with credit reports and scores on consumers.
Credit Fraud/Identity Theft
A crime that involves using another's name or other personal information to acquire credit, make purchases or transact business in that name
Credit History
A record of how a consumer has paid credit accounts in the past. It is used as a guide to determine whether or not the consumer is likely to pay future accounts on time.
Credit Line
The amount of credit issued by a lender
Credit Rating
A score and an analysis of the information contained within your credit report. Each piece of information in your report is given points based on how it compares to people who pay their bills and loans on time. The more positively it compares to these people, the higher your score and overall credit rating becomes.
Credit Repair Agencies/Credit Clinics
Companies that claim they can "clean up" or "erase" a consumer's bad credit
Credit Report
A record or file used by a prospective lender or employer that chronicles the credit standing of a prospective borrower. It is used to help determine creditworthiness of the potential borrower.
Credit Risk
The likelihood of a consumer to pay back an outstanding debt
Creditworthiness
An assessment of a consumer's past credit behaviour that allows a potential lender to decide whether or not to extend credit
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D
Debit Card
A card that allows purchases to be deducted directly from a consumer's personal checking account
Debt Counselling Agencies
Organisations that help consumers find a way to repay debts through careful budgeting and fund management. These agencies are usually non-profit organisations funded by creditors. By requesting a longer pay-off period from creditors one-by-one, a counsellor can often design a workable repayment plan on behalf of the consumer.
Default
Failure to fulfil an agreed-upon financial obligation, such as making a loan payment
Delinquency (30, 60 or 90 days)
Past-due payment on a loan
Discretionary Income
The money you have left over when all expenses and other financial obligations are paid
Disposable Income
Money left over after taxes are deducted
Dispute
To question the accuracy of information on a credit report. Disputes may now be effectively resolved online by notifying Equifax
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E
Equifax, Plc
A credit reference agency operating in the the United Kingdom holding consumer and commercial information.
G
Grace Period
The period allowed to avoid any finance charges by paying off the balance in full before the due date
Gross Monthly Income
What you earn before taxes are deducted
H
Home Equity Loan/Equity Loan/Second Mortgage
A loan based on the difference of the amount of equity paid on a home and the home's current market value. But if your loan is not paid, your home could be sold to pay off the debt.
I
Identity Fraud
A fast-growing crime that occurs when someone uses your personal information to commit a crime or steal in your name.
Instalment Loan
A credit account in which the amount of the payment and the number of payments are predetermined or fixed
Interest
The cost of borrowing or lending money, usually a percentage of the amount borrowed or loaned
Interest Rate
The amount charged by a lender for borrowing money
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L
Late Fee
A fee attached to a delinquent account
Lien
A legal claim upon real or personal property for the satisfaction of a debt
Line of credit
A credit limit established by a creditor
M
Mortgage Debts
Includes first mortgages, home equity loans, and any other loans secured by your real estate, including second homes and investment property
N
Notice of Correction
An explanation of circumstances or statements disassociating you from the details held in your file. If you feel that the information contained in your credit file may adversely affect your ability to obtain credit, you have a statutory right to add a Notice to your file.
O
Open Account
An account that is still active or still being paid
Order of Discharge
The courts declare that an individual who has been declared bankrupt to now have fulfilled his obligations or to be release from the liability.
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P
Permissible Purpose
As defined in the Data Protection Act, only specific reasons for requesting a credit report are deemed "permissible." Requests not meeting these criteria must be denied.
Personal Line of Credit
The maximum amount one can owe at any time, based on income, debt and credit history
Principal
The outstanding balance of a loan, exclusive of interest and other charges
Public Record
Information obtained from public or court records about such things as electoral roll registration, tax liens, bankruptcy filings and judgments against you in civil actions. Public records are open to any person who requests them.
R
Repossession
The act of a creditor regaining possession of an item sold to you
Revolving Charge Account
An account that requires at least a specified minimum payment each month plus a service charge on the balance. As the balance declines, the amount of the service charge, or interest, also declines.
Revolving Balance
The total balance of all revolving credit accounts
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S
Search
The name and address of an individual being submitted to Equifax in order to obtain information held in Equifax databases regarding the individual's identity and financial performance.
Secured Credit Card
A credit card secured by a savings account
Service Charge
Additional services applied to an account
Sequestration
Applicable in Scotland - equivalent to Bankruptcy
T
Tax Lien
A charge upon real or personal property for the satisfaction of debts related to taxes
Term
The amount of time in which a loan must be repaid in full
V
Voluntary Arrangement
All of an individual's creditors agreeing jointly to the arrangements for repayment and forgiveness of a debtor's obligation in an effort to avoid an Order of Bankruptcy.
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