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23 Cards in this Set
- Front
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The use of a statistical model to objectively evaluate and "score" credit applications and credit bureau 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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Application scoring
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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 years
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Bankruptcy
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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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Charge-off
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Attempted recovery of a past-due credit obligation by a collection department or agency.
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Collection
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a Credit bureau record on a given individual. It may include: consumer name, address, Social Security number, credit history, inquiries, collection records, and public records such as bakruptcy filings and tax liens.
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Consumer credit file
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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 three largest credit bureaus in the U.S. are Equifax, Experian and TransUnion.
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Credit Bureau
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A type of credit score based solely on data stored at the major credit bureaus. It offers a snapshot of a consumer's credit reish at a particular point in time, and rates the likelihood that the consumer will repay debts as agreed.
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Credit Bureau risk score
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A record of how a consumer has repaid credit obligations in the the past
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Credit History
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An agreement by which a person is lefally bound to pay back borrowed lmoney or used credit.
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Credit obligation
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Information communicated by a credit reporting agenct that bears on a consumer's credit standing. Most credit reports include: name, address, credit history, inquiries, collection records, and any public records such as bankruptcy filings and tax liens.
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Credit report
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The likelihood that an individual will pay his or her credit obligatons as agreed. Borrowers who are more likely to pay as agreed pose less risk to creditors and lenders.
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Credit Risk
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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 making a credit decision.
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Credit Score
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A failure to make a loan or debt payment when due. Usually an accoun is considered to be "in default" after being delinquent for several consecutive 30-day billing cycles.
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Default
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A failure to deliver even the minimom payment on a loan or debt payment on or before the time agreed. Accounts are referred to as 30, 60, 90 or 120 days delinquent because most lenders have monthly payment cycles
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Delinquent
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Federal legislation that prohibits discrimination in credit. The ECOA originally was enacted in 1974 as Title VII of the Consumer Credit Protection Act.
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Equal Credit Opportunity Act ECOA
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Federal legislation that promotes the accuracy, confidentiality and proper use of infromation in the files of every "consumer reportin agency". The FCRA was enacted in 1970
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Fair Credit Reporting Act (FCRA)
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Credit bureau rish scores produced from models developed bt Fair Isaac Corporation are comonly known as FICO scores. Fair Isaac credit bureau scores are used by lenders and others to assess the credit risk of prospective borrowers or existing customers, in order to help make credit and marketing decisions. These scores are derived solely from credit bureau reports.
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FICO scores
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An item on a consumer's credit report that shows that someone with a "permissible purpose" (under FCRA rules) has perviously requested a copy of the consumer's report. Fair Isaac credit bureau risk scores take into account only inquiries resultion from a consumer's application for credit.
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Inquiry
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Debt to be paid at regular times over a specified period. Examples include most mortgage and auto loans.
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Installment debt
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An insurance rating based solely on credit bureau data stored at the major credit bureaus. It offers a snapshot of an individual's insurance risk at a particular point in time, and helps insurers evaluate new and renewal auto and homeowner insurance policies.
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Insurance bureau score
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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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late payment
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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 are the most common type of revolving account.
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Revolving Debt
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A statistical formula that is used, usually with the help of computers, to estimate future performance of prospective borrowers and existing customers. A scoring model calculates scores based on data such as information on a consumer's credit report
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Scoring model
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