My Chapter 13 Bankruptcy Info
Understanding Credit Terminology
When it comes to credit, there are a multitude of terms that you should understand. These terms are used often when it comes to credit and help you better understand exactly what is involved in credit. Read this guide Credit terminology and learn about the world of credit.
Adjusted balance – The balance is adjusted method of calculating your credit balance and the annual percentage rate (APR), payment and / or credits made during the billing cycle are subtracted from your balance at the end of the previous billing cycle. This method is more advantageous to borrowers and credit card holders. Unlike the average daily balance calculations, new purchases during the billing period are not included in calculating the adjusted balance, and interest is applied to the balance remaining after payments are credited to your account.
Depreciation – Depreciation is a payment plan that allows the borrower to reduce capital debt payments monthly.
Annual Percentage Rate (APR) – APR is the annual rate of lenders require borrowers to borrow money (called also the cost of credit). Lenders must disclose the APR that have taken over before finalizing the transaction. Lenders may not disclose or changes in April borrower after the lender agreement / signature. However, some credit card companies and state enterprises in the loan agreement that can change your APR when interest rates or exchange rates.
Average Daily Balance – The average daily balance is a method of calculating the balance credit and interest. It is the practice of credit to your account from the day we receive payment. In other words, this is a daily tracking of what you owe. When calculating average daily balance, the lender adds the beginning balance for each day of the billing period and subtracts any payments or credits to your account that day. The end result is the average daily balance. New purchases are not necessarily added to your account on the day of purchase, and not on the daily balance. When the purchase is deducted your account, affects the balance.
Bankruptcy – Bankruptcy is a form of financial protection when the borrower can not pay the rent or mortgage, no credit or means to pay, and is unable to reconcile with collection agencies. There are two methods of filing personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy to eliminate all debts (taxes, less payments and perhaps support), with all non-exempt (as are described in Chapter 7 filing) and make money cash to pay debts. A Chapter 13 bankruptcy allows a borrower with a regular income to pay the bills for a period of 36-60 months. Chapter 13 presentation is available for those who have predictable income and a means of paying their debts during the period of time.
Credit Score – A credit score is a statistical credit earned in the consumer credit report. A common type of credit score is the score FICO, Beacon and Empirica include other. They are used to calculate the probability that you will pay for future loans, depending on your credit history.
FICO – FICO is a mathematical equation / information lenders use to evaluate the risk associated with lending money. FICO score means Fair Isaac Company, who originally created the formula.
Settlement – Settlement is the process of converting assets into cash to creditors. This process is used in cases personal bankruptcy and the company as a way out of debt with lenders.
Recovery – Recovery is forced or voluntary surrender of merchandise as a result client's inability to pay the debt. If you buy something on credit and not pay for it, the entity that sold it to you, is recovered.
Renewable – A bearing is an account that requires a minimum payment each month plus the cost of service. When the balance is reduced service costs or diminished interest.
terminology Credit can be confusing. If you study the options for credit and want to know what is at stake, use this guide to catch up on some of the conditions most common credit.
About the Author
Brad Stroh is currently co-CEO of Freedom Financial Network and Bills.com. If you would like more of Brad’s articles, please visit the Bills.com information on Credit.
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