Credit Repair GlossaryFinancial Terms Made Simple
Understanding credit repair terms is the first step toward taking control of your financial future.
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All Credit Terms
B
Bankruptcy
A legal proceeding that provides debt relief to individuals or businesses who can't pay their debts.
Read more →Blanket Lien
A lien that gives a creditor the right to seize all of a debtor's assets if the debt is not repaid.
Read more →Breach of Contract
Failure by one party to fulfill their obligations under a legally binding agreement.
Read more →Business Credit Profile
A record detailing a company's credit history and financial reliability, separate from the owner's personal credit.
Read more →C
Capitalized Interest
Unpaid interest that is added to the principal balance of a loan, increasing the total amount owed.
Read more →Cash Secured Loan
A type of loan backed by funds held in a savings account or certificate of deposit (CD) owned by the borrower.
Read more →Chapter 13 Bankruptcy
A bankruptcy proceeding that allows individuals to reorganize their finances and repay a portion of their debts over 3-5 years.
Read more →Chapter 7 Bankruptcy
A bankruptcy proceeding that liquidates non-exempt assets to pay creditors and discharges most remaining unsecured debts.
Read more →Charge-Off
When a creditor writes off a debt as uncollectible after prolonged non-payment.
Read more →Chattel Mortgage
A loan secured by movable personal property (chattel), such as vehicles, equipment, or manufactured homes.
Read more →Collateralized Debt Obligation (CDO)
A complex financial product that pools together cash flow-generating assets and repackages them into tranches sold to investors.
Read more →Collection Account
A debt that has been transferred to a third-party collection agency for recovery.
Read more →Commercial Credit File
Synonym for Business Credit Profile; a record of a company's credit history.
Read more →Compensatory Damages
Money awarded in a lawsuit to compensate the plaintiff for actual losses or injuries suffered.
Read more →Conditional Sale Agreement
A financing contract where the buyer possesses goods, but ownership (title) remains with the seller until full payment is made.
Read more →Consensual Lien
A lien placed on property with the owner's consent, typically as part of a loan agreement.
Read more →Consumer Financial Protection Bureau (CFPB)
A U.S. government agency dedicated to making sure consumers are treated fairly by banks, lenders, and other financial companies.
Read more →Contingent Liability
A potential future obligation that depends on the outcome of an uncertain event.
Read more →Covenant Default
Violation of a specific term or condition (covenant) in a loan agreement, other than failing to make payments.
Read more →Credit Application Process
The steps involved when applying for credit, from submitting an application to receiving a decision.
Read more →Credit Bureau
An agency that collects and maintains consumer credit information.
Read more →Credit Counseling
Professional guidance to help individuals manage their debt, create budgets, and improve their financial habits.
Read more →Credit Freeze
A security measure that restricts access to your credit report, preventing new accounts from being opened in your name.
Read more →Credit Limit
The maximum amount of money you can borrow on a credit card or revolving line of credit.
Read more →Credit Mix
The variety of credit accounts in your credit report, including credit cards, retail accounts, installment loans, and mortgages.
Read more →Credit Monitoring
A service that tracks your credit reports and alerts you to changes that could indicate fraud or identity theft.
Read more →Credit Report
A detailed record of your credit history compiled by credit bureaus.
Read more →Credit Restoration
The process of improving damaged credit through removing inaccurate information and establishing positive credit habits.
Read more →Credit Score
A numerical rating that represents your creditworthiness based on your credit history.
Read more →Credit Utilization Ratio
The percentage of your available credit that you're currently using.
Read more →Cross-Collateralization
A clause allowing collateral for one loan to also serve as collateral for other debts owed to the same lender.
Read more →Cure Period
A specified timeframe allowed for a party to fix (cure) a default or breach of contract before facing penalties.
Read more →D
Debt Avalanche
A debt reduction strategy where you pay off debts in order from highest interest rate to lowest, regardless of balance.
Read more →Debt Collection
The process of pursuing payments of debts owed by individuals or businesses.
Read more →Debt Consolidation
The process of combining multiple debts into a single loan or payment, usually at a lower interest rate.
Read more →Debt Management Plan
A structured program where a credit counseling agency helps negotiate lower interest rates and consolidated payments for your debts.
Read more →Debt Settlement
An agreement to pay a lump sum that's less than the full amount owed to satisfy a debt.
Read more →Debt Snowball
A debt reduction strategy where you pay off debts in order from smallest balance to largest, regardless of interest rate.
Read more →Debt Validation
The legal process requiring debt collectors to verify a debt's legitimacy before continuing collection.
Read more →Deed in Lieu of Foreclosure
Voluntarily transferring property ownership to the lender to avoid foreclosure when unable to make mortgage payments.
Read more →Deficiency Balance
The remaining debt owed after collateral securing a loan is sold for less than the outstanding loan amount.
Read more →Delinquency Rate
The percentage of loans within a portfolio or group that have past-due payments.
Read more →Demand Clause
A loan provision allowing the lender to require full repayment at any time, even if the borrower is current on payments.
Read more →Depository Creditor
A financial institution, like a bank or credit union, that accepts deposits and also extends credit.
Read more →Derivative Debt
A financial instrument whose value is derived from an underlying debt asset.
Read more →Diligence Letter
A formal communication, often from a debt collector, providing detailed information about a debt.
Read more →Dischargeable Debt
A type of debt that can be legally eliminated or wiped out through bankruptcy.
Read more →Discounted Payoff
An agreement where a lender accepts a lump-sum payment that is less than the full outstanding loan balance to settle the debt.
Read more →Dispute
The process of challenging incorrect or inaccurate information on your credit report.
Read more →Dragnet Clause
A loan provision stating that collateral securing one debt also secures any other past, present, or future debts owed to the same lender.
Read more →E
Equitable Lien
A lien imposed by a court based on fairness (equity) rather than a formal contract or statute.
Read more →Escrow Account
An account held by a third party (like a lender) to collect and pay property taxes and insurance on behalf of a homeowner.
Read more →Ex Parte Communication
Communication between one party in a legal case and the judge or decision-maker without the other party being present.
Read more →Exempt Income
Sources of income that are legally protected from being seized by creditors or debt collectors.
Read more →Extinguished Debt
Debt that is considered legally settled or removed, often through repayment, settlement, bankruptcy discharge, or expiration of the statute of limitations.
Read more →F
Factoring Agreement
A financial arrangement where a business sells its accounts receivable (invoices) to a third party (factor) at a discount for immediate cash.
Read more →Fair Credit Reporting Act (FCRA)
Federal law that regulates how credit reporting agencies collect, access, and use your credit information.
Read more →Fair Debt Collection Practices Act (FDCPA)
A U.S. federal law that limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity.
Read more →FICO Score
The most widely used credit score model created by the Fair Isaac Corporation.
Read more →Fiduciary Duty
A legal obligation requiring one party (fiduciary) to act solely in the best interests of another party (principal).
Read more →Forbearance Agreement
A temporary agreement where a lender allows a borrower to pause or reduce payments for a limited time due to hardship.
Read more →Forfeiture Clause
A contract provision stating that a party will lose certain rights or property if they breach the agreement.
Read more →Fraud Alert
A notice placed on your credit report that warns creditors to verify your identity before opening new accounts.
Read more →G
H
I
Identity Theft
The fraudulent acquisition and use of a person's private identifying information, typically to steal money or obtain credit.
Read more →Impaired Credit
A credit history that includes negative information, making it difficult to obtain new credit or favorable terms.
Read more →Incontestability Clause
A clause in insurance policies preventing the insurer from voiding coverage based on misstatements after a certain period.
Read more →Indemnity Bond
A type of surety bond guaranteeing compensation for financial loss if a party fails to meet specific obligations.
Read more →Injunctive Relief
A court order requiring a party to do or stop doing a specific act, rather than paying monetary damages.
Read more →Insolvency Proceedings
Formal legal processes initiated when an individual or company cannot pay their debts.
Read more →Installment Credit
A loan for a fixed amount that is repaid with a set number of scheduled payments over a predetermined period.
Read more →Intercreditor Agreement
A contract between two or more creditors of the same debtor, defining their respective rights and lien priorities regarding collateral.
Read more →Interest Rate
The percentage charged by a lender for borrowing money, or paid by a bank for depositing money.
Read more →Involuntary Lien
A lien placed on property without the owner's consent, usually due to unpaid debts or legal obligations.
Read more →J
L
Late Payment
A payment made after the due date on a credit account.
Read more →Lien
A legal claim against a property that serves as security for a debt or obligation.
Read more →Lien Priority
The order in which different liens on the same property are paid off if the property is sold.
Read more →Lien Subordination
An agreement where one lienholder allows their lien to rank behind another lienholder's claim on the same property.
Read more →Liquidated Damages
A specific amount of money pre-agreed upon in a contract to be paid as compensation if a breach occurs.
Read more →Loan-to-Value Ratio (LTV)
A ratio comparing the amount of a loan to the appraised value of the asset securing the loan, typically used in mortgages.
Read more →Loss Mitigation
Efforts by lenders and borrowers to avoid foreclosure or minimize losses when a borrower struggles to make mortgage payments.
Read more →P
Pay for Delete
An arrangement where a collection agency agrees to remove a negative entry from your credit report in exchange for payment of the debt.
Read more →Payment History
A record of whether you've paid your credit accounts on time, which is the most influential factor in credit scoring.
Read more →Preferential Transfer
A payment made by an insolvent debtor to a specific creditor shortly before filing bankruptcy, potentially recoverable by the trustee.
Read more →Prepayment Clause
A loan agreement term outlining conditions or penalties for paying off a loan before its scheduled maturity date.
Read more →Priority Debt
Certain types of unsecured debt given higher priority for repayment than general unsecured debts in bankruptcy.
Read more →Promissory Estoppel
A legal principle allowing enforcement of a promise, even without a formal contract, if someone reasonably relied on the promise to their detriment.
Read more →Proof of Claim
A form filed in bankruptcy court by a creditor stating the amount owed to them by the debtor.
Read more →Public Record
Legal information about you that is on file with a court, such as bankruptcies, judgments, and tax liens.
Read more →Punitive Damages
Damages awarded in a lawsuit to punish the defendant for egregious misconduct and deter similar future behavior, beyond compensating the plaintiff.
Read more →R
Reaffirmation Agreement
An agreement made by a debtor during bankruptcy to continue paying a specific dischargeable debt, often to keep collateral.
Read more →Recourse Loan
A type of secured debt where the lender can seize collateral *and* pursue the borrower personally for deficiencies if the collateral sale is insufficient.
Read more →Redemption Period
A specific timeframe after a foreclosure sale during which the borrower can reclaim their property by paying off the debt.
Read more →Rescission Rights
The legal right of a borrower to cancel certain types of loans within a specific timeframe after closing.
Read more →Restructuring Agreement
A formal agreement between a debtor and creditors to modify the terms of existing debts, often to avoid bankruptcy.
Read more →Revolving Credit
A type of credit that allows repeated borrowing up to a certain limit without having to reapply.
Read more →Right of Offset (Setoff)
A lender's legal right to seize funds from a borrower's deposit account to cover a defaulted debt owed to the same institution.
Read more →S
Secured Credit Card
A credit card that requires a security deposit, which typically determines the credit limit.
Read more →Securitization
The process of pooling various types of debt (like mortgages or loans) and selling repackaged interests in the pool to investors.
Read more →Soft Inquiry
A credit check that does not affect your credit score.
Read more →Specialized Credit Reporting Agency
Agencies that collect specific types of consumer information beyond traditional credit data, used for employment, tenant screening, insurance, etc.
Read more →Statute of Limitations
The time period during which a creditor can legally sue you to collect a debt.
Read more →Subordination Agreement
A legal contract establishing that one debt or lien ranks behind another debt or lien in priority.
Read more →Surety Bond
A three-party contract guaranteeing that one party (principal) will fulfill an obligation to another party (obligee), backed by a surety company.
Read more →T
Third-Party Guarantor
An individual or entity who agrees to be legally responsible for repaying another person's debt if the primary borrower defaults.
Read more →TILA Violation
A failure by a creditor to comply with the disclosure requirements of the Truth in Lending Act.
Read more →Title Defect
Any issue, claim, or encumbrance that clouds ownership rights to real property, making the title unclear or unmarketable.
Read more →Tradeline
An entry on your credit report representing a credit account, detailing its history and status.
Read more →Credit Terms by Category
Accounts Receivable
Banking
Depository Creditor
A financial institution, like a bank or credit union, that accepts deposits and also extends credit.
Read more →Right of Offset (Setoff)
A lender's legal right to seize funds from a borrower's deposit account to cover a defaulted debt owed to the same institution.
Read more →Securitization
The process of pooling various types of debt (like mortgages or loans) and selling repackaged interests in the pool to investors.
Read more →Bankruptcy
Bankruptcy
A legal proceeding that provides debt relief to individuals or businesses who can't pay their debts.
Read more →Chapter 13 Bankruptcy
A bankruptcy proceeding that allows individuals to reorganize their finances and repay a portion of their debts over 3-5 years.
Read more →Chapter 7 Bankruptcy
A bankruptcy proceeding that liquidates non-exempt assets to pay creditors and discharges most remaining unsecured debts.
Read more →Dischargeable Debt
A type of debt that can be legally eliminated or wiped out through bankruptcy.
Read more →Exempt Income
Sources of income that are legally protected from being seized by creditors or debt collectors.
Read more →Extinguished Debt
Debt that is considered legally settled or removed, often through repayment, settlement, bankruptcy discharge, or expiration of the statute of limitations.
Read more →Garnishment Exemption
Legal protection preventing certain types or amounts of income or assets from being seized through garnishment.
Read more →Insolvency Proceedings
Formal legal processes initiated when an individual or company cannot pay their debts.
Read more →Lien Priority
The order in which different liens on the same property are paid off if the property is sold.
Read more →Preferential Transfer
A payment made by an insolvent debtor to a specific creditor shortly before filing bankruptcy, potentially recoverable by the trustee.
Read more →Priority Debt
Certain types of unsecured debt given higher priority for repayment than general unsecured debts in bankruptcy.
Read more →Proof of Claim
A form filed in bankruptcy court by a creditor stating the amount owed to them by the debtor.
Read more →Reaffirmation Agreement
An agreement made by a debtor during bankruptcy to continue paying a specific dischargeable debt, often to keep collateral.
Read more →Bankruptcy Alternatives
Bonds
Indemnity Bond
A type of surety bond guaranteeing compensation for financial loss if a party fails to meet specific obligations.
Read more →Surety Bond
A three-party contract guaranteeing that one party (principal) will fulfill an obligation to another party (obligee), backed by a surety company.
Read more →Business Credit
Blanket Lien
A lien that gives a creditor the right to seize all of a debtor's assets if the debt is not repaid.
Read more →Business Credit Profile
A record detailing a company's credit history and financial reliability, separate from the owner's personal credit.
Read more →Commercial Credit File
Synonym for Business Credit Profile; a record of a company's credit history.
Read more →Business Financing
Factoring Agreement
A financial arrangement where a business sells its accounts receivable (invoices) to a third party (factor) at a discount for immediate cash.
Read more →Intercreditor Agreement
A contract between two or more creditors of the same debtor, defining their respective rights and lien priorities regarding collateral.
Read more →Collateral
Cross-Collateralization
A clause allowing collateral for one loan to also serve as collateral for other debts owed to the same lender.
Read more →Dragnet Clause
A loan provision stating that collateral securing one debt also secures any other past, present, or future debts owed to the same lender.
Read more →Complex Financial Products
Consumer Rights
Consumer Financial Protection Bureau (CFPB)
A U.S. government agency dedicated to making sure consumers are treated fairly by banks, lenders, and other financial companies.
Read more →Debt Collection
The process of pursuing payments of debts owed by individuals or businesses.
Read more →Debt Validation
The legal process requiring debt collectors to verify a debt's legitimacy before continuing collection.
Read more →Diligence Letter
A formal communication, often from a debt collector, providing detailed information about a debt.
Read more →Dispute
The process of challenging incorrect or inaccurate information on your credit report.
Read more →Exempt Income
Sources of income that are legally protected from being seized by creditors or debt collectors.
Read more →Fair Credit Reporting Act (FCRA)
Federal law that regulates how credit reporting agencies collect, access, and use your credit information.
Read more →Fair Debt Collection Practices Act (FDCPA)
A U.S. federal law that limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity.
Read more →Garnishment Exemption
Legal protection preventing certain types or amounts of income or assets from being seized through garnishment.
Read more →Original Creditor
The lender or company that initially provided credit or services before the debt was assigned to a collection agency.
Read more →Rescission Rights
The legal right of a borrower to cancel certain types of loans within a specific timeframe after closing.
Read more →Specialized Credit Reporting Agency
Agencies that collect specific types of consumer information beyond traditional credit data, used for employment, tenant screening, insurance, etc.
Read more →Statute of Limitations
The time period during which a creditor can legally sue you to collect a debt.
Read more →TILA Violation
A failure by a creditor to comply with the disclosure requirements of the Truth in Lending Act.
Read more →Validation
The process where a debt collector must prove that you owe a debt.
Read more →Contracts
Breach of Contract
Failure by one party to fulfill their obligations under a legally binding agreement.
Read more →Conditional Sale Agreement
A financing contract where the buyer possesses goods, but ownership (title) remains with the seller until full payment is made.
Read more →Cure Period
A specified timeframe allowed for a party to fix (cure) a default or breach of contract before facing penalties.
Read more →Forfeiture Clause
A contract provision stating that a party will lose certain rights or property if they breach the agreement.
Read more →Holder in Due Course
Someone who acquires a negotiable instrument (like a check or promissory note) in good faith, for value, without notice of defects, gaining special legal protections.
Read more →Incontestability Clause
A clause in insurance policies preventing the insurer from voiding coverage based on misstatements after a certain period.
Read more →Liquidated Damages
A specific amount of money pre-agreed upon in a contract to be paid as compensation if a breach occurs.
Read more →Material Adverse Change (MAC)
A significant negative event or change that substantially impacts a business or transaction, potentially allowing a party to withdraw from a deal.
Read more →Prepayment Clause
A loan agreement term outlining conditions or penalties for paying off a loan before its scheduled maturity date.
Read more →Promissory Estoppel
A legal principle allowing enforcement of a promise, even without a formal contract, if someone reasonably relied on the promise to their detriment.
Read more →Subordination Agreement
A legal contract establishing that one debt or lien ranks behind another debt or lien in priority.
Read more →Surety Bond
A three-party contract guaranteeing that one party (principal) will fulfill an obligation to another party (obligee), backed by a surety company.
Read more →Corporate Finance
Court Procedures
Ex Parte Communication
Communication between one party in a legal case and the judge or decision-maker without the other party being present.
Read more →Injunctive Relief
A court order requiring a party to do or stop doing a specific act, rather than paying monetary damages.
Read more →Judicial Foreclosure
A foreclosure process that is processed through the court system, requiring the lender to file a lawsuit.
Read more →Credit Applications
Credit Basics
Business Credit Profile
A record detailing a company's credit history and financial reliability, separate from the owner's personal credit.
Read more →Credit Application Process
The steps involved when applying for credit, from submitting an application to receiving a decision.
Read more →Credit Bureau
An agency that collects and maintains consumer credit information.
Read more →Credit Limit
The maximum amount of money you can borrow on a credit card or revolving line of credit.
Read more →Credit Mix
The variety of credit accounts in your credit report, including credit cards, retail accounts, installment loans, and mortgages.
Read more →Credit Report
A detailed record of your credit history compiled by credit bureaus.
Read more →Credit Score
A numerical rating that represents your creditworthiness based on your credit history.
Read more →FICO Score
The most widely used credit score model created by the Fair Isaac Corporation.
Read more →Installment Credit
A loan for a fixed amount that is repaid with a set number of scheduled payments over a predetermined period.
Read more →Interest Rate
The percentage charged by a lender for borrowing money, or paid by a bank for depositing money.
Read more →Original Creditor
The lender or company that initially provided credit or services before the debt was assigned to a collection agency.
Read more →Payment History
A record of whether you've paid your credit accounts on time, which is the most influential factor in credit scoring.
Read more →Revolving Credit
A type of credit that allows repeated borrowing up to a certain limit without having to reapply.
Read more →Third-Party Guarantor
An individual or entity who agrees to be legally responsible for repaying another person's debt if the primary borrower defaults.
Read more →Tradeline
An entry on your credit report representing a credit account, detailing its history and status.
Read more →Credit Building
Authorized User
A person who is permitted to use another person's credit card account but isn't legally responsible for paying the debt.
Read more →Cash Secured Loan
A type of loan backed by funds held in a savings account or certificate of deposit (CD) owned by the borrower.
Read more →Credit Mix
The variety of credit accounts in your credit report, including credit cards, retail accounts, installment loans, and mortgages.
Read more →Secured Credit Card
A credit card that requires a security deposit, which typically determines the credit limit.
Read more →Credit Cards
Authorized User
A person who is permitted to use another person's credit card account but isn't legally responsible for paying the debt.
Read more →Credit Limit
The maximum amount of money you can borrow on a credit card or revolving line of credit.
Read more →Revolving Credit
A type of credit that allows repeated borrowing up to a certain limit without having to reapply.
Read more →Secured Credit Card
A credit card that requires a security deposit, which typically determines the credit limit.
Read more →Credit Laws
Fair Credit Reporting Act (FCRA)
Federal law that regulates how credit reporting agencies collect, access, and use your credit information.
Read more →Fair Debt Collection Practices Act (FDCPA)
A U.S. federal law that limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity.
Read more →TILA Violation
A failure by a creditor to comply with the disclosure requirements of the Truth in Lending Act.
Read more →Credit Management
Credit Limit
The maximum amount of money you can borrow on a credit card or revolving line of credit.
Read more →Credit Monitoring
A service that tracks your credit reports and alerts you to changes that could indicate fraud or identity theft.
Read more →Credit Restoration
The process of improving damaged credit through removing inaccurate information and establishing positive credit habits.
Read more →Credit Utilization Ratio
The percentage of your available credit that you're currently using.
Read more →Goodwill Letter
A written request asking a creditor to remove negative information from your credit report as an act of goodwill.
Read more →Late Payment
A payment made after the due date on a credit account.
Read more →Payment History
A record of whether you've paid your credit accounts on time, which is the most influential factor in credit scoring.
Read more →Credit Problems
Charge-Off
When a creditor writes off a debt as uncollectible after prolonged non-payment.
Read more →Collection Account
A debt that has been transferred to a third-party collection agency for recovery.
Read more →Debt Collection
The process of pursuing payments of debts owed by individuals or businesses.
Read more →Debt Settlement
An agreement to pay a lump sum that's less than the full amount owed to satisfy a debt.
Read more →Discounted Payoff
An agreement where a lender accepts a lump-sum payment that is less than the full outstanding loan balance to settle the debt.
Read more →Goodwill Letter
A written request asking a creditor to remove negative information from your credit report as an act of goodwill.
Read more →Impaired Credit
A credit history that includes negative information, making it difficult to obtain new credit or favorable terms.
Read more →Judgment
A court order requiring you to pay a debt owed to a creditor who has successfully sued you.
Read more →Late Payment
A payment made after the due date on a credit account.
Read more →Pay for Delete
An arrangement where a collection agency agrees to remove a negative entry from your credit report in exchange for payment of the debt.
Read more →Public Record
Legal information about you that is on file with a court, such as bankruptcies, judgments, and tax liens.
Read more →Credit Repair
Credit Counseling
Professional guidance to help individuals manage their debt, create budgets, and improve their financial habits.
Read more →Credit Restoration
The process of improving damaged credit through removing inaccurate information and establishing positive credit habits.
Read more →Debt Consolidation
The process of combining multiple debts into a single loan or payment, usually at a lower interest rate.
Read more →Debt Management Plan
A structured program where a credit counseling agency helps negotiate lower interest rates and consolidated payments for your debts.
Read more →Dispute
The process of challenging incorrect or inaccurate information on your credit report.
Read more →Goodwill Letter
A written request asking a creditor to remove negative information from your credit report as an act of goodwill.
Read more →Impaired Credit
A credit history that includes negative information, making it difficult to obtain new credit or favorable terms.
Read more →Pay for Delete
An arrangement where a collection agency agrees to remove a negative entry from your credit report in exchange for payment of the debt.
Read more →Secured Credit Card
A credit card that requires a security deposit, which typically determines the credit limit.
Read more →Credit Reports
Commercial Credit File
Synonym for Business Credit Profile; a record of a company's credit history.
Read more →Credit Bureau
An agency that collects and maintains consumer credit information.
Read more →Credit Report
A detailed record of your credit history compiled by credit bureaus.
Read more →Public Record
Legal information about you that is on file with a court, such as bankruptcies, judgments, and tax liens.
Read more →Soft Inquiry
A credit check that does not affect your credit score.
Read more →Specialized Credit Reporting Agency
Agencies that collect specific types of consumer information beyond traditional credit data, used for employment, tenant screening, insurance, etc.
Read more →Tradeline
An entry on your credit report representing a credit account, detailing its history and status.
Read more →Credit Scores
Credit Mix
The variety of credit accounts in your credit report, including credit cards, retail accounts, installment loans, and mortgages.
Read more →Credit Restoration
The process of improving damaged credit through removing inaccurate information and establishing positive credit habits.
Read more →Credit Score
A numerical rating that represents your creditworthiness based on your credit history.
Read more →Credit Utilization Ratio
The percentage of your available credit that you're currently using.
Read more →FICO Score
The most widely used credit score model created by the Fair Isaac Corporation.
Read more →Hard Inquiry
A formal credit check that occurs when you apply for new credit.
Read more →Impaired Credit
A credit history that includes negative information, making it difficult to obtain new credit or favorable terms.
Read more →Payment History
A record of whether you've paid your credit accounts on time, which is the most influential factor in credit scoring.
Read more →Soft Inquiry
A credit check that does not affect your credit score.
Read more →Credit Security
Credit Freeze
A security measure that restricts access to your credit report, preventing new accounts from being opened in your name.
Read more →Credit Monitoring
A service that tracks your credit reports and alerts you to changes that could indicate fraud or identity theft.
Read more →Fraud Alert
A notice placed on your credit report that warns creditors to verify your identity before opening new accounts.
Read more →Identity Theft
The fraudulent acquisition and use of a person's private identifying information, typically to steal money or obtain credit.
Read more →Creditor Rights
Preferential Transfer
A payment made by an insolvent debtor to a specific creditor shortly before filing bankruptcy, potentially recoverable by the trustee.
Read more →Proof of Claim
A form filed in bankruptcy court by a creditor stating the amount owed to them by the debtor.
Read more →Right of Offset (Setoff)
A lender's legal right to seize funds from a borrower's deposit account to cover a defaulted debt owed to the same institution.
Read more →Damages
Liquidated Damages
A specific amount of money pre-agreed upon in a contract to be paid as compensation if a breach occurs.
Read more →Punitive Damages
Damages awarded in a lawsuit to punish the defendant for egregious misconduct and deter similar future behavior, beyond compensating the plaintiff.
Read more →Debt Collection
Collection Account
A debt that has been transferred to a third-party collection agency for recovery.
Read more →Debt Collection
The process of pursuing payments of debts owed by individuals or businesses.
Read more →Debt Validation
The legal process requiring debt collectors to verify a debt's legitimacy before continuing collection.
Read more →Deficiency Balance
The remaining debt owed after collateral securing a loan is sold for less than the outstanding loan amount.
Read more →Diligence Letter
A formal communication, often from a debt collector, providing detailed information about a debt.
Read more →Exempt Income
Sources of income that are legally protected from being seized by creditors or debt collectors.
Read more →Fair Debt Collection Practices Act (FDCPA)
A U.S. federal law that limits the behavior and actions of third-party debt collectors who are attempting to collect debts on behalf of another person or entity.
Read more →Garnishment Exemption
Legal protection preventing certain types or amounts of income or assets from being seized through garnishment.
Read more →Involuntary Lien
A lien placed on property without the owner's consent, usually due to unpaid debts or legal obligations.
Read more →Judgment
A court order requiring you to pay a debt owed to a creditor who has successfully sued you.
Read more →Lien
A legal claim against a property that serves as security for a debt or obligation.
Read more →Original Creditor
The lender or company that initially provided credit or services before the debt was assigned to a collection agency.
Read more →Pay for Delete
An arrangement where a collection agency agrees to remove a negative entry from your credit report in exchange for payment of the debt.
Read more →Right of Offset (Setoff)
A lender's legal right to seize funds from a borrower's deposit account to cover a defaulted debt owed to the same institution.
Read more →Statute of Limitations
The time period during which a creditor can legally sue you to collect a debt.
Read more →Validation
The process where a debt collector must prove that you owe a debt.
Read more →Debt Management
Bankruptcy
A legal proceeding that provides debt relief to individuals or businesses who can't pay their debts.
Read more →Chapter 13 Bankruptcy
A bankruptcy proceeding that allows individuals to reorganize their finances and repay a portion of their debts over 3-5 years.
Read more →Chapter 7 Bankruptcy
A bankruptcy proceeding that liquidates non-exempt assets to pay creditors and discharges most remaining unsecured debts.
Read more →Charge-Off
When a creditor writes off a debt as uncollectible after prolonged non-payment.
Read more →Credit Counseling
Professional guidance to help individuals manage their debt, create budgets, and improve their financial habits.
Read more →Debt Avalanche
A debt reduction strategy where you pay off debts in order from highest interest rate to lowest, regardless of balance.
Read more →Debt Consolidation
The process of combining multiple debts into a single loan or payment, usually at a lower interest rate.
Read more →Debt Management Plan
A structured program where a credit counseling agency helps negotiate lower interest rates and consolidated payments for your debts.
Read more →Debt Settlement
An agreement to pay a lump sum that's less than the full amount owed to satisfy a debt.
Read more →Debt Snowball
A debt reduction strategy where you pay off debts in order from smallest balance to largest, regardless of interest rate.
Read more →Deed in Lieu of Foreclosure
Voluntarily transferring property ownership to the lender to avoid foreclosure when unable to make mortgage payments.
Read more →Discounted Payoff
An agreement where a lender accepts a lump-sum payment that is less than the full outstanding loan balance to settle the debt.
Read more →Extinguished Debt
Debt that is considered legally settled or removed, often through repayment, settlement, bankruptcy discharge, or expiration of the statute of limitations.
Read more →Forbearance Agreement
A temporary agreement where a lender allows a borrower to pause or reduce payments for a limited time due to hardship.
Read more →Installment Credit
A loan for a fixed amount that is repaid with a set number of scheduled payments over a predetermined period.
Read more →Loss Mitigation
Efforts by lenders and borrowers to avoid foreclosure or minimize losses when a borrower struggles to make mortgage payments.
Read more →Restructuring Agreement
A formal agreement between a debtor and creditors to modify the terms of existing debts, often to avoid bankruptcy.
Read more →Revolving Credit
A type of credit that allows repeated borrowing up to a certain limit without having to reapply.
Read more →Debt Relief
Dischargeable Debt
A type of debt that can be legally eliminated or wiped out through bankruptcy.
Read more →Extinguished Debt
Debt that is considered legally settled or removed, often through repayment, settlement, bankruptcy discharge, or expiration of the statute of limitations.
Read more →Insolvency Proceedings
Formal legal processes initiated when an individual or company cannot pay their debts.
Read more →Priority Debt
Certain types of unsecured debt given higher priority for repayment than general unsecured debts in bankruptcy.
Read more →Reaffirmation Agreement
An agreement made by a debtor during bankruptcy to continue paying a specific dischargeable debt, often to keep collateral.
Read more →Default
Covenant Default
Violation of a specific term or condition (covenant) in a loan agreement, other than failing to make payments.
Read more →Cure Period
A specified timeframe allowed for a party to fix (cure) a default or breach of contract before facing penalties.
Read more →Deficiency Balance
The remaining debt owed after collateral securing a loan is sold for less than the outstanding loan amount.
Read more →Forfeiture Clause
A contract provision stating that a party will lose certain rights or property if they breach the agreement.
Read more →Financial Education
Credit Counseling
Professional guidance to help individuals manage their debt, create budgets, and improve their financial habits.
Read more →Debt Management Plan
A structured program where a credit counseling agency helps negotiate lower interest rates and consolidated payments for your debts.
Read more →Financial Guarantees
Indemnity Bond
A type of surety bond guaranteeing compensation for financial loss if a party fails to meet specific obligations.
Read more →Surety Bond
A three-party contract guaranteeing that one party (principal) will fulfill an obligation to another party (obligee), backed by a surety company.
Read more →Financial Institutions
Financial Markets
Collateralized Debt Obligation (CDO)
A complex financial product that pools together cash flow-generating assets and repackages them into tranches sold to investors.
Read more →Derivative Debt
A financial instrument whose value is derived from an underlying debt asset.
Read more →Securitization
The process of pooling various types of debt (like mortgages or loans) and selling repackaged interests in the pool to investors.
Read more →Financial Metrics
Financial Planning
Financial Risk
Contingent Liability
A potential future obligation that depends on the outcome of an uncertain event.
Read more →Demand Clause
A loan provision allowing the lender to require full repayment at any time, even if the borrower is current on payments.
Read more →Third-Party Guarantor
An individual or entity who agrees to be legally responsible for repaying another person's debt if the primary borrower defaults.
Read more →Financial Strategies
Financial Terms
Foreclosure
Deed in Lieu of Foreclosure
Voluntarily transferring property ownership to the lender to avoid foreclosure when unable to make mortgage payments.
Read more →Deficiency Balance
The remaining debt owed after collateral securing a loan is sold for less than the outstanding loan amount.
Read more →Judicial Foreclosure
A foreclosure process that is processed through the court system, requiring the lender to file a lawsuit.
Read more →Lien Priority
The order in which different liens on the same property are paid off if the property is sold.
Read more →Loss Mitigation
Efforts by lenders and borrowers to avoid foreclosure or minimize losses when a borrower struggles to make mortgage payments.
Read more →Redemption Period
A specific timeframe after a foreclosure sale during which the borrower can reclaim their property by paying off the debt.
Read more →Fraud Prevention
Identity Protection
Credit Freeze
A security measure that restricts access to your credit report, preventing new accounts from being opened in your name.
Read more →Credit Monitoring
A service that tracks your credit reports and alerts you to changes that could indicate fraud or identity theft.
Read more →Fraud Alert
A notice placed on your credit report that warns creditors to verify your identity before opening new accounts.
Read more →Identity Theft
The fraudulent acquisition and use of a person's private identifying information, typically to steal money or obtain credit.
Read more →Insurance
Incontestability Clause
A clause in insurance policies preventing the insurer from voiding coverage based on misstatements after a certain period.
Read more →Indemnity Bond
A type of surety bond guaranteeing compensation for financial loss if a party fails to meet specific obligations.
Read more →Surety Bond
A three-party contract guaranteeing that one party (principal) will fulfill an obligation to another party (obligee), backed by a surety company.
Read more →Interest Rates
Capitalized Interest
Unpaid interest that is added to the principal balance of a loan, increasing the total amount owed.
Read more →Interest Rate
The percentage charged by a lender for borrowing money, or paid by a bank for depositing money.
Read more →Prepayment Clause
A loan agreement term outlining conditions or penalties for paying off a loan before its scheduled maturity date.
Read more →Investments
Collateralized Debt Obligation (CDO)
A complex financial product that pools together cash flow-generating assets and repackages them into tranches sold to investors.
Read more →Derivative Debt
A financial instrument whose value is derived from an underlying debt asset.
Read more →Securitization
The process of pooling various types of debt (like mortgages or loans) and selling repackaged interests in the pool to investors.
Read more →Lawsuits
Compensatory Damages
Money awarded in a lawsuit to compensate the plaintiff for actual losses or injuries suffered.
Read more →Punitive Damages
Damages awarded in a lawsuit to punish the defendant for egregious misconduct and deter similar future behavior, beyond compensating the plaintiff.
Read more →Quiet Title Action
A lawsuit filed to establish clear ownership of real property by resolving competing claims or clouds on the title.
Read more →Legal Protections
Legal Terms
Bankruptcy
A legal proceeding that provides debt relief to individuals or businesses who can't pay their debts.
Read more →Breach of Contract
Failure by one party to fulfill their obligations under a legally binding agreement.
Read more →Chapter 13 Bankruptcy
A bankruptcy proceeding that allows individuals to reorganize their finances and repay a portion of their debts over 3-5 years.
Read more →Chapter 7 Bankruptcy
A bankruptcy proceeding that liquidates non-exempt assets to pay creditors and discharges most remaining unsecured debts.
Read more →Compensatory Damages
Money awarded in a lawsuit to compensate the plaintiff for actual losses or injuries suffered.
Read more →Conditional Sale Agreement
A financing contract where the buyer possesses goods, but ownership (title) remains with the seller until full payment is made.
Read more →Consensual Lien
A lien placed on property with the owner's consent, typically as part of a loan agreement.
Read more →Contingent Liability
A potential future obligation that depends on the outcome of an uncertain event.
Read more →Covenant Default
Violation of a specific term or condition (covenant) in a loan agreement, other than failing to make payments.
Read more →Cross-Collateralization
A clause allowing collateral for one loan to also serve as collateral for other debts owed to the same lender.
Read more →Cure Period
A specified timeframe allowed for a party to fix (cure) a default or breach of contract before facing penalties.
Read more →Demand Clause
A loan provision allowing the lender to require full repayment at any time, even if the borrower is current on payments.
Read more →Diligence Letter
A formal communication, often from a debt collector, providing detailed information about a debt.
Read more →Dischargeable Debt
A type of debt that can be legally eliminated or wiped out through bankruptcy.
Read more →Dragnet Clause
A loan provision stating that collateral securing one debt also secures any other past, present, or future debts owed to the same lender.
Read more →Equitable Lien
A lien imposed by a court based on fairness (equity) rather than a formal contract or statute.
Read more →Ex Parte Communication
Communication between one party in a legal case and the judge or decision-maker without the other party being present.
Read more →Extinguished Debt
Debt that is considered legally settled or removed, often through repayment, settlement, bankruptcy discharge, or expiration of the statute of limitations.
Read more →Fiduciary Duty
A legal obligation requiring one party (fiduciary) to act solely in the best interests of another party (principal).
Read more →Forfeiture Clause
A contract provision stating that a party will lose certain rights or property if they breach the agreement.
Read more →Holder in Due Course
Someone who acquires a negotiable instrument (like a check or promissory note) in good faith, for value, without notice of defects, gaining special legal protections.
Read more →Incontestability Clause
A clause in insurance policies preventing the insurer from voiding coverage based on misstatements after a certain period.
Read more →Indemnity Bond
A type of surety bond guaranteeing compensation for financial loss if a party fails to meet specific obligations.
Read more →Injunctive Relief
A court order requiring a party to do or stop doing a specific act, rather than paying monetary damages.
Read more →Insolvency Proceedings
Formal legal processes initiated when an individual or company cannot pay their debts.
Read more →Intercreditor Agreement
A contract between two or more creditors of the same debtor, defining their respective rights and lien priorities regarding collateral.
Read more →Involuntary Lien
A lien placed on property without the owner's consent, usually due to unpaid debts or legal obligations.
Read more →Judgment
A court order requiring you to pay a debt owed to a creditor who has successfully sued you.
Read more →Lien
A legal claim against a property that serves as security for a debt or obligation.
Read more →Liquidated Damages
A specific amount of money pre-agreed upon in a contract to be paid as compensation if a breach occurs.
Read more →Material Adverse Change (MAC)
A significant negative event or change that substantially impacts a business or transaction, potentially allowing a party to withdraw from a deal.
Read more →Preferential Transfer
A payment made by an insolvent debtor to a specific creditor shortly before filing bankruptcy, potentially recoverable by the trustee.
Read more →Priority Debt
Certain types of unsecured debt given higher priority for repayment than general unsecured debts in bankruptcy.
Read more →Promissory Estoppel
A legal principle allowing enforcement of a promise, even without a formal contract, if someone reasonably relied on the promise to their detriment.
Read more →Proof of Claim
A form filed in bankruptcy court by a creditor stating the amount owed to them by the debtor.
Read more →Public Record
Legal information about you that is on file with a court, such as bankruptcies, judgments, and tax liens.
Read more →Punitive Damages
Damages awarded in a lawsuit to punish the defendant for egregious misconduct and deter similar future behavior, beyond compensating the plaintiff.
Read more →Quiet Title Action
A lawsuit filed to establish clear ownership of real property by resolving competing claims or clouds on the title.
Read more →Reaffirmation Agreement
An agreement made by a debtor during bankruptcy to continue paying a specific dischargeable debt, often to keep collateral.
Read more →Recourse Loan
A type of secured debt where the lender can seize collateral *and* pursue the borrower personally for deficiencies if the collateral sale is insufficient.
Read more →Redemption Period
A specific timeframe after a foreclosure sale during which the borrower can reclaim their property by paying off the debt.
Read more →Rescission Rights
The legal right of a borrower to cancel certain types of loans within a specific timeframe after closing.
Read more →Restructuring Agreement
A formal agreement between a debtor and creditors to modify the terms of existing debts, often to avoid bankruptcy.
Read more →Right of Offset (Setoff)
A lender's legal right to seize funds from a borrower's deposit account to cover a defaulted debt owed to the same institution.
Read more →Statute of Limitations
The time period during which a creditor can legally sue you to collect a debt.
Read more →Subordination Agreement
A legal contract establishing that one debt or lien ranks behind another debt or lien in priority.
Read more →Third-Party Guarantor
An individual or entity who agrees to be legally responsible for repaying another person's debt if the primary borrower defaults.
Read more →TILA Violation
A failure by a creditor to comply with the disclosure requirements of the Truth in Lending Act.
Read more →Title Defect
Any issue, claim, or encumbrance that clouds ownership rights to real property, making the title unclear or unmarketable.
Read more →Liens
Blanket Lien
A lien that gives a creditor the right to seize all of a debtor's assets if the debt is not repaid.
Read more →Consensual Lien
A lien placed on property with the owner's consent, typically as part of a loan agreement.
Read more →Equitable Lien
A lien imposed by a court based on fairness (equity) rather than a formal contract or statute.
Read more →Intercreditor Agreement
A contract between two or more creditors of the same debtor, defining their respective rights and lien priorities regarding collateral.
Read more →Involuntary Lien
A lien placed on property without the owner's consent, usually due to unpaid debts or legal obligations.
Read more →Lien Priority
The order in which different liens on the same property are paid off if the property is sold.
Read more →Lien Subordination
An agreement where one lienholder allows their lien to rank behind another lienholder's claim on the same property.
Read more →Subordination Agreement
A legal contract establishing that one debt or lien ranks behind another debt or lien in priority.
Read more →Loans
Blanket Lien
A lien that gives a creditor the right to seize all of a debtor's assets if the debt is not repaid.
Read more →Capitalized Interest
Unpaid interest that is added to the principal balance of a loan, increasing the total amount owed.
Read more →Cash Secured Loan
A type of loan backed by funds held in a savings account or certificate of deposit (CD) owned by the borrower.
Read more →Chattel Mortgage
A loan secured by movable personal property (chattel), such as vehicles, equipment, or manufactured homes.
Read more →Consensual Lien
A lien placed on property with the owner's consent, typically as part of a loan agreement.
Read more →Covenant Default
Violation of a specific term or condition (covenant) in a loan agreement, other than failing to make payments.
Read more →Cross-Collateralization
A clause allowing collateral for one loan to also serve as collateral for other debts owed to the same lender.
Read more →Debt Consolidation
The process of combining multiple debts into a single loan or payment, usually at a lower interest rate.
Read more →Delinquency Rate
The percentage of loans within a portfolio or group that have past-due payments.
Read more →Demand Clause
A loan provision allowing the lender to require full repayment at any time, even if the borrower is current on payments.
Read more →Dragnet Clause
A loan provision stating that collateral securing one debt also secures any other past, present, or future debts owed to the same lender.
Read more →Forbearance Agreement
A temporary agreement where a lender allows a borrower to pause or reduce payments for a limited time due to hardship.
Read more →Installment Credit
A loan for a fixed amount that is repaid with a set number of scheduled payments over a predetermined period.
Read more →Intercreditor Agreement
A contract between two or more creditors of the same debtor, defining their respective rights and lien priorities regarding collateral.
Read more →Interest Rate
The percentage charged by a lender for borrowing money, or paid by a bank for depositing money.
Read more →Prepayment Clause
A loan agreement term outlining conditions or penalties for paying off a loan before its scheduled maturity date.
Read more →Recourse Loan
A type of secured debt where the lender can seize collateral *and* pursue the borrower personally for deficiencies if the collateral sale is insufficient.
Read more →Rescission Rights
The legal right of a borrower to cancel certain types of loans within a specific timeframe after closing.
Read more →Subordination Agreement
A legal contract establishing that one debt or lien ranks behind another debt or lien in priority.
Read more →Third-Party Guarantor
An individual or entity who agrees to be legally responsible for repaying another person's debt if the primary borrower defaults.
Read more →Loss Mitigation
Forbearance Agreement
A temporary agreement where a lender allows a borrower to pause or reduce payments for a limited time due to hardship.
Read more →Loss Mitigation
Efforts by lenders and borrowers to avoid foreclosure or minimize losses when a borrower struggles to make mortgage payments.
Read more →Mergers & Acquisitions
Mortgages
Chattel Mortgage
A loan secured by movable personal property (chattel), such as vehicles, equipment, or manufactured homes.
Read more →Deed in Lieu of Foreclosure
Voluntarily transferring property ownership to the lender to avoid foreclosure when unable to make mortgage payments.
Read more →Dragnet Clause
A loan provision stating that collateral securing one debt also secures any other past, present, or future debts owed to the same lender.
Read more →Escrow Account
An account held by a third party (like a lender) to collect and pay property taxes and insurance on behalf of a homeowner.
Read more →Forbearance Agreement
A temporary agreement where a lender allows a borrower to pause or reduce payments for a limited time due to hardship.
Read more →Judicial Foreclosure
A foreclosure process that is processed through the court system, requiring the lender to file a lawsuit.
Read more →Lien Subordination
An agreement where one lienholder allows their lien to rank behind another lienholder's claim on the same property.
Read more →Loan-to-Value Ratio (LTV)
A ratio comparing the amount of a loan to the appraised value of the asset securing the loan, typically used in mortgages.
Read more →Loss Mitigation
Efforts by lenders and borrowers to avoid foreclosure or minimize losses when a borrower struggles to make mortgage payments.
Read more →Prepayment Clause
A loan agreement term outlining conditions or penalties for paying off a loan before its scheduled maturity date.
Read more →Recourse Loan
A type of secured debt where the lender can seize collateral *and* pursue the borrower personally for deficiencies if the collateral sale is insufficient.
Read more →Redemption Period
A specific timeframe after a foreclosure sale during which the borrower can reclaim their property by paying off the debt.
Read more →Rescission Rights
The legal right of a borrower to cancel certain types of loans within a specific timeframe after closing.
Read more →Subordination Agreement
A legal contract establishing that one debt or lien ranks behind another debt or lien in priority.
Read more →TILA Violation
A failure by a creditor to comply with the disclosure requirements of the Truth in Lending Act.
Read more →Placeholder Category
Property Law
Property Ownership
Real Estate
Deed in Lieu of Foreclosure
Voluntarily transferring property ownership to the lender to avoid foreclosure when unable to make mortgage payments.
Read more →Escrow Account
An account held by a third party (like a lender) to collect and pay property taxes and insurance on behalf of a homeowner.
Read more →Involuntary Lien
A lien placed on property without the owner's consent, usually due to unpaid debts or legal obligations.
Read more →Loan-to-Value Ratio (LTV)
A ratio comparing the amount of a loan to the appraised value of the asset securing the loan, typically used in mortgages.
Read more →Real Estate Law
Equitable Lien
A lien imposed by a court based on fairness (equity) rather than a formal contract or statute.
Read more →Judicial Foreclosure
A foreclosure process that is processed through the court system, requiring the lender to file a lawsuit.
Read more →Lien Priority
The order in which different liens on the same property are paid off if the property is sold.
Read more →Lien Subordination
An agreement where one lienholder allows their lien to rank behind another lienholder's claim on the same property.
Read more →Quiet Title Action
A lawsuit filed to establish clear ownership of real property by resolving competing claims or clouds on the title.
Read more →Redemption Period
A specific timeframe after a foreclosure sale during which the borrower can reclaim their property by paying off the debt.
Read more →Title Defect
Any issue, claim, or encumbrance that clouds ownership rights to real property, making the title unclear or unmarketable.
Read more →Secured Debt
Cash Secured Loan
A type of loan backed by funds held in a savings account or certificate of deposit (CD) owned by the borrower.
Read more →Chattel Mortgage
A loan secured by movable personal property (chattel), such as vehicles, equipment, or manufactured homes.
Read more →Reaffirmation Agreement
An agreement made by a debtor during bankruptcy to continue paying a specific dischargeable debt, often to keep collateral.
Read more →Recourse Loan
A type of secured debt where the lender can seize collateral *and* pursue the borrower personally for deficiencies if the collateral sale is insufficient.
Read more →