Subscribe Via RSS
If you are reading this it means you are willing to gain some knowledge about credit but the jargon of credit is obstructing you. But you have landed up on right place that will help you fight your problem and learn about credit. Listed below are major terms colligated with credit with their simple definitions. This might prove to be of great help for novice users.
Credit
Credit is a form of debt generated when a person purchases goods or services in his name of in name of a company without making payment for the purchase at that time but ensuring to clear the debt on a later date.
Credit history
It is a report that contains details of all your past borrowing and repayment deals. Even events of missing payment, resulting in reference of your account to collection agency, or bankruptcy appear in this report. It is also referred to as credit history and describes credit worthiness of the account bearer. This report is used by credit lending companies for evaluating credit risk associated with client.
Credit score
It is a score based on statistical analysis of credit report. It is used in scoring models employed by companies for assessing credit risk.
Credit risk
Credit risk is the loss incurred by a creditor if debtor fails to make the repayment, i.e. he/ she fails to fulfill the promises made regarding payment of the debt.
Credit dispute
Credit dispute refers to any kind of erroneous entry in credit report. It is necessary to report the error and rectify it, because failing the same may hamper your credit scores.
Credit note
Credit note or credit memo is a document made out by creditor for debtor. It is either of an amount equal to or less than payment in previous invoice. It is issued for the products or services which were intended to be received by buyer but he didn’t or returned back. It may be issued for damaged goods also. With respect to previous invoice, it reduces the amount to be paid by buyer.
Unsecured Credit
When credit is lent to a borrower only on basis of a verbal commitment that involves no supplementary security; it is termed as Unsecured Credit. It is referred to as unsecured because there is no guarantee that debtor will make repayment; and in case he fails to fulfill his promise, investor suffers a loss.
Credit card
It is a plastic card that renders you power to purchase without paying at that moment. The card holder gets a credit card issued that can be used for shopping purposes or online and telephonic ordering of products or services and even for withdrawal of cash. At the time of purchase user signs a receipt bearing card and user details that is consent for making the card issuing company afterwards. This is because that company paid the merchant for your purchase.
Many agencies can send credit cards to virtually any places in the world via free shipping worldwide. However, manufacturer’s warranty issues, company limitations and traditions regulations prevent them from delivery certain products to certain regional destinations. You will send the requested credit card within 48 hours after order verification. Please allow 5-8 business days for delivery.
APR
APR stands for Annual Percentage Rate which is the rate of interest charged on unbalanced payment of credit card bill, after the tenure of interest free period is over. It includes all basic charges like fee for the card, collection charges etc. But optional charges like credit insurance and late payment penalties are excluded. Typically APR is greater than interest rates on other credit forms like installment loans, etc.
Social