Managing Credit Unit Vocab

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Amounts Owed

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How much you owe each creditor individually and in total; 30% of your credit score is based on this.

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Bankruptcy

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A legal proceeding carried out to allow individuals or businesses freedom from their debts, while simultaneously providing creditors an opportunity for repayment.

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Charge-Off

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A declaration by a creditor (usually a credit card account) that an amount of debt is unlikely to be collected; occurs when a consumer becomes severely delinquent on a debt.

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Collections

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An attempted recovery of a past-due credit obligation or debt by a collection department or agency.

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Consumer Financial Protection Bureau (CFPB)

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A U.S. government agency that helps protect consumers by regulating financial products and services, like mortgages, credit cards, and student loans.

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Credit

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An agreement in which a borrower receives something of value now and agrees to repay the lender in the future, generally with interest.

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Credit Bureau

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A consumer-reporting company that collects and sells information about how individual people manage their credit (e.g. Equifax).

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Credit History

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A record of a person's use of credit over time; 15% of your credit score is based on the length of your credit history.

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Credit Report

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A document with information about a person’s credit activity and history.

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Credit Score

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A three-digit number (ranging from 300-850) based on an individual's credit history detailed in a credit report.