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Common Credit Terms

by: Sahil | last updated: November 13, 2009
Tags: Credit terms, credit card, credit report, bankruptcy, chapter 7, chapter 11

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Common Credit Terms

There are numerous terms related to credit and credit reports; most of these terms are defined by various acts such as the Fair Credit Reporting Act or the Equal Credit Opportunity Act. Some of the most common and important terms used in transactions involving credit and credit reports are given below.

Chapter 7 Bankruptcy Chapter of the Bankruptcy Code that provides for court administered insolvency of the assets of a monetarily troubled person or business.

Chapter 11 Bankruptcy This is the Chapter of the Bankruptcy Code that is typically used for the restructuring of a fiscally troubled industry. Used as a substitute to insolvency under Chapter 7. The U.S. Supreme Court has held that an individual may in addition make use of Chapter 11.

Chapter 12 Bankruptcy This Chapter of the Bankruptcy Code was for approving to address the financial crisis of the nations agricultural society. Cases under this chapter are managed similar to Chapter 11 cases, however with exceptional protections to meet the unusual conditions of family farmhouse functions.

Chapter 13 Bankruptcy This is the Chapter of the Bankruptcy Code in which debtors pay back amount outstanding according to an arrangement acknowledged by the debtor, the creditors and the court. Plan payments more often than not come from the debtors potential earnings and are paid to creditors through the court system and the bankruptcy trustee.

Credit Report A credit report is a confidential report on a consumers payment behavior as reported by their creditors to a consumer credit reporting agency. The agency supplies the relevant data to credit grantors who have a permissible purpose under the law to evaluate the report.

Permissible Purpose There are legally distinct permissible purposes for a credit report to be issued to a third party. Permissible purposes comprise of credit transactions, employment purposes, insurance underwriting, government monetary responsibility laws, court orders, subpoenas, written directions of the consumer, and lawful business needs.

Charge-offs The action of moving accounts considered uncollectible to a grouping such as bad debt or loss. Collectors will typically carry on soliciting payments, however the accounts are no longer considered an element of a companys receivable or profit picture.

Revolving Credit This type of credit is the one that is routinely obtainable up to a prearranged upper limit limit so long as a customer makes expected payments.

Unsecured Credit This is a type of credit for which no security has been promised. Loans made under this agreement are now and then called signature loans; in other words, a loan is approved based just on the customers words, through signing a contract that the loan amount will be paid back

Security Alert This is a Statement that is a supplementary document once Experian is informed that a consumer might be a prey of scam. It remains on file for 90 days and needs that a creditor asks for evidence of credentials prior to giving away credit in that persons name.