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23 Cards in this Set
- Front
- Back
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Application Scoring
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The use of a statistical model to objectively evaluate and "score" credit applications and credit bureau data in order to assess likely future performance. Scores help businesses make decisions such as whether to accept or decline the application.
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Bankruptcy
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A proceeding in U.S. Bankruptcy Court that may legally release a person from repaying debts owed. Credit reports normally include bankruptcies for up to 10 yrs.
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Charge-off
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The balance on a credit obligation that a lender no longer expects to be repaid and writes off as a bad debt.
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Collection
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Attempted recovery of a past-due credit obligation by a collection department or agency.
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Comsumer credit file
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A credit bureau record on a given individual. It may include: consumer name, address, Social Secruity number, credit history, inquires, collection records, and public records such as bankruptcy filings and tax liens.
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Credit bureau
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A credit reporting agency that is a clearinghouse for information on the credit rating of individuals or firms. Is often called a "credit repository" or a "consumer reporting agency". The 3 largest credit bureaus in the U.S. are Equifax, Experian and TransUnion.
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Credit bureau risk score
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A type of credit score based solely on data stored at teh major credit bureaus. It offers a snapshot or a consumer's credit risk at a paritcular point in time, and rates teh likelihood that the consumer will repay debts as agreed.
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Credit history
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a record of how a consumer has repaid credit obligations in the past.
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Credit obligation
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An agreement by which a person is legally bound to pay back borrowed money or used credit.
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Credit report
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Information communicated by a credit reporting agency that bears on a consumer's credit standing. Most credit reports include: name, address, credit history, inquires, collection records, and any public records such as bankruptcy filings and tax liens.
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Credit risk
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The likeligood that an individual will pay his or her credit obligations as agreed. Borrowers who are more likely to pay as agreed pose less risk to creditors and lenders.
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Credit score
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This term is often used to refer to credit bureau risk scores. It broadly refers to a number generated by a statistical model which is used to objectively evaluate information that pertains to makeing a credit decision.
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Default
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A failure to make a loan or debt payment when due. usually an account is considered to be "in default" after being delinquent for several consecutive 30-day billing cycles.
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Delinquent
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A failure to deliver even the minimum payment on a loan or debt payment on or before the time agreed.
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Equal credit opportunity act
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Federal legislation that prohibits discrimination in credit. ECOA originally was enacted in 1974 as Title VII of the Consumer Credit Protection Act.
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Fair credit reporting act
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Federal legislation that promotes the accuracy, confidentiality and proper use of information in the files of every "consumer reporting agency". The FCRA was enacted in 1970.
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FICO scores
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Credit bureau risk scores produced from models developed by Fair Isaac Corporation are commonly known as FICO scores. These scores are derived solely from credit bureau reports.
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Inquiry
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An item on a consumer's credit report that shows that someone with a
permissible purpose" has previously requested a copy of the consumer's report. |
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Installment debt
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Debt to be paid at regular times over a specified period. Ex: mortgage & auto loans.
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Insurance bureau score
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An insurance rating based solely on credit bureau data stored at the major credit bureaus.
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Late payment
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A delinquent payment; a failure to deliver a loan or debt payment on or before the time agreed.
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Revolving debt
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Debt owed on an account that the borrower can repeatedly use and pay back without having to reapply every time credit is used. Credit cards used most common.
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Scoring model
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A statistical formula that is used to estimate future performance of prospective borrowers and existing customers.
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