Glossary of Credit Terms

Glossary of Credit Terms:
Balance – total debt you owe for all open and closed accounts on your credit report.

Balance transfer – moving a balance from one account to another.

Charge-off – the balance on a credit obligation that a lender no longer expects to be repaid and writes off a bad debt.

Collection – when a past-due credit obligation is sent to a collection agency.

Credit availability – the amount of credit you have remaining on your credit account.

Credit history – record of how someone has borrowed and paid debt.

Default – failure to make a loan or debt payment when due.  An account is typically considered to be in default after being delinquent for several consecutive 30-day billing cycles.

Delinquent – an account that is currently past due for the minimum required payment. Accounts are usually referred to as 30, 60, 90 or 120 days delinquent.

Derogatory – the number of accounts on your credit report that are negatively impacting your credit score.

Installment debt – debt to be paid at regular intervals over a specified period (mortgage and auto loans).