Glossary of Terms

An additional name that can be reported by Third Party Collection Agencies and Debt Buyers within the Original Creditor Name field (Outside Agencies Tab in M2R). The Affinity Name further identifies the relationship of the original creditor to any connecting or supporting entities.

Describes a character set that includes both letters and numbers.

Person permitted by a credit card holder to charge goods and services on the cardholder's account. Authorized users are not legally responsible for payment of the charges incurred.

The filing of a bankruptcy, under any chapter of the Bankruptcy Code, stops most actions by any creditor against the debtor or the debtor's property. In Chapter 13, the stay even protects co-debtors (non-filers) who are liable with the debtor on consumer debts. The automatic stay gives the debtor protection from creditors until the rights of all concerned can be balanced in bankruptcy court.

A bankruptcy case may be closed or terminated when the consumer does not pay the applicable court fees or does not attend the required financial management class.

The judgment of the court that a person who has filed a Chapter 7, 11, or 12 petition be granted a bankruptcy. A Chapter 13 debtor is entitled to a discharge upon completion of all payments under the Chapter 13 plan.

A Chapter 7, 11, 12, or 13 petition is terminated without the granting of a discharge by the U.S. Bankruptcy Court.

An application made to the U.S. Bankruptcy Court requesting release from financial obligations due to a debtor's inability to pay debts.

An application made to the U.S. Bankruptcy Court requesting financial reorganization.

An application made to the U.S. Bankruptcy Court requesting release from financial obligations due to the inability of a family farm to pay its debts.

An application made to the U.S. Bankruptcy Court requesting adjustment for personal debts and the establishment of a repayment plan.

The petitioner has decided not to file bankruptcy and has withdrawn the petition.

See Personal Receivership.

One who buys goods or services.

CDIA is an international trade association representing the consumer credit, mortgage reporting, employment and tenant screening, and collection service industries. Headquartered in Washington, DC, CDIA provides legislative assistance and a lobbying function to its members, and establishes standards for the consumer credit reporting industry.

A method by which data furnishers divide their files for reporting purposes, usually in alphabetical order by surname or by billing date. Reporting takes place at the end of each billing cycle, resulting in more accurate and timely reporting of account statuses.

A company or individual who purchases accounts (generally non-performing debts) with the intent of collecting debts owed.

A federal law that prohibits creditors from discriminating against applicants on the basis of sex or marital status in any aspect of a credit transaction.

An alpha or numeric code used to describe a borrower's association with an account, according to the Equal Credit Opportunity Act (ECOA). Refer to Exhibit 10 for a list of ECOA codes, their definitions, and logical usage.

See Debt Buyer.

A federal law stipulating procedures to help consumers resolve credit billing disputes with the credit grantor promptly and fairly. The FCBA applies to open-end credit accounts, such as credit cards and revolving charge accounts.

The FCRA states that companies which furnish data to the consumer reporting agencies have a responsibility to provide accurate information, to update and correct information, and to respond to notices of dispute. It also states that consumers have the right to know what is in their credit records, to challenge the accuracy of information, and to have it reverified, updated, or removed. It also limits the time derogatory information can be retained on a credit record.

The FDCPA regulates the activities of debt collectors concerning their communications with consumers, prohibiting harassment or abuse, false or misleading representations, and unfair practices.

A loan in which the interest rate does not change during the entire term of the loan.

A credit card with no preset spending limit. The card has a Credit Limit, but its terms allow the consumer to exceed that amount. Refer to FAQ 67 for reporting guidelines.

A period of time during repayment in which a borrower is permitted to temporarily postpone making regular monthly payments. The debt is not forgiven — payments are suspended until a later time. Forbearance is most commonly applied to mortgages and student loans but is applicable to any type of loan. Refer to FAQ 45 for reporting guidelines.

A loan repayable in installments, usually in set monthly amounts.

The debtor's assumption of personal liability for leases of personal property that would otherwise be discharged in bankruptcy. When a lease is assumed, the consumer is assuming use of the personal property (such as an auto) and payment on the account. Refer to FAQs 27(c) and (d) for reporting guidelines.

An agreement between an institution and a consumer where the institution agrees to lend funds up to an agreed credit limit. The consumer may borrow as much of the line as needed and pays interest on the borrowed portion only. Payment amounts are revolving, based on the outstanding balance.

A new borrower assumes responsibility for a loan. The original borrower is terminated and is no longer responsible for payments. Refer to FAQ 55 for reporting guidelines.

A new borrower assumes responsibility for a loan. The original borrower remains responsible in the event the new borrower defaults. Refer to FAQ 56 for reporting guidelines.

Data furnishers report accounts a minimum of once per month. The Date of Account Information is the "as of" date for the information being reported and represents the monthly reporting period — which may be any day within the period and should be consistent from month to month.

For cycle reporters, each cycle represents a reporting period (e.g., accounts that cycle on the 5th of every month are reported on the 5th). For monthly reporters, data reported at month-end should always be reported at month-end (01/31, 02/28, etc.) and data reported mid-month should always be at mid-month (01/15, 02/15, etc.).

A written conveyance of title to real estate property. The creditor holds actual title but the property remains with the borrower as long as the mortgage conditions are met.

Accounts where the entire balance is due upon demand or that have one payment due as scheduled (Terms Duration = 001). Used by credit card reporters when the full balance is due each month, and also by Collection Agencies, Child Support Agencies, Debt Buyers, Student Loan Guarantors, the U.S. Department of Education, and Utility Services payment plans.

A voluntary debt repayment plan filed in Wisconsin (Chapter 128) that is an alternative to bankruptcy. The plan is administered by a court-appointed trustee and lasts no more than three years. Refer to FAQ 33 for reporting guidelines.

An agreement by a debtor to continue paying a dischargeable debt after bankruptcy, usually for the purpose of keeping collateral or mortgaged property that would otherwise be subject to repossession. Done through the U.S. Bankruptcy Court. Refer to FAQs 27(c) and (d).

The consumer may rescind a reaffirmation agreement prior to the bankruptcy discharge or within 60 days after the reaffirmation is filed with the court, whichever occurs later. This cancels the reaffirmation and the debts are again included in or discharged through bankruptcy. Refer to FAQs 27(c) and (d).

When foreclosure is started on property, or merchandise is repossessed or voluntarily surrendered, the consumer can "redeem" the property by paying the debt in full. Refer to FAQs 52, 62, and 63.

In a bankruptcy filing, the consumer can choose to redeem merchandise from a creditor by paying fair market value. Refer to FAQ 31.

To avoid foreclosure, or when merchandise is repossessed or voluntarily surrendered, the consumer can "reinstate" the loan by bringing account payments current — making up all late payments, including applicable fees and late charges. Refer to FAQs 52, 62, and 63.

A bankruptcy judge grants a secured creditor the right to collect a debt included in bankruptcy, to the extent the order permits. Refer to FAQ 24.

See Monthly Reporting Period.

An account that establishes a maximum credit limit for a consumer, such as a credit card or charge account. Payment amounts are revolving based on the outstanding balance.

The sale of real estate in which the proceeds fall short of the balance owed on the loan secured by the property. In a short sale, the lender agrees to discount the loan balance, typically due to financial hardship on the part of the consumer. Refer to FAQ 53.

Assets, portfolios, or accounts purchased by another company. The new company takes ownership of the accounts/notes. Refer to FAQs 47 and 48.

A company or individual who specializes in collecting outstanding debts for other businesses or individuals.

Ownership of accounts/notes is not affected. For example, a lender moves the processing of accounts from one internal department to another, or from one servicer to another. Refer to FAQ 46.

A loan in which the interest rate is periodically adjusted based on various indices, usually in response to changes in the Treasury Bill rate or the prime rate.