Credit Glossary of Terms

There are several terms related to credit restoration and repair that are good to know. Our team at Trinity Credit Services wants our clients to be educated about how credit can affect many aspects of their life.

Credit Report
U.S. citizens have a credit report documenting their financial history beginning at age 18. Everyone starts out with a clean slate at this time and it is a good to learn about how to establish good credit.

Credit Scoring
Credit scores are based on a letter and/or number system that analyzes your debt payment history to determine your worth and credibility.

Credit History
Tracks all loan and credit card accounts as you borrow and pay back money.

Credit Rating
calculated worthiness of an individual or company

Debt is money owed and the arrangement to pay the money back.

A creditor is also known as a lender and fronts the money for your loan.

A debtor is also knows as a borrower and has entered into a loan agreement with a lender.

Interest is the percentage or rate at which the original amount borrowed will increase upon paying the lender back.

An asset is a financial resource, something that produces value

The legal declaration of the inability to pay a debt.

FICO is the formula /calculation which lenders use to evaluate a borrowers risk. Fico is just one scoring system to determine credibility.

Liquidation is the process of converting assets into cash to pay off creditors.

If a borrower fails to pay a debt, the purchased item can be taken back from the borrower.

Annual Percentage Rate (APR)
APR is the yearly rate lenders charge borrowers while the debt is outstanding.

Evidence debt is decreasing by regular payments of principal and interest.

Minimum payment
The lowest amount required to pay monthly on a credit card in order to keep it in good standing.

Credit Line
The maximum amount of money that can be charged to a credit card.