Introduction to credit [
top]
Credit is an important tool in today’s world. Credit can make it possible to own a home or a car, to run a small business or make our daily purchases. In an emergency, having access to credit can be a lifesaver. So knowing just what credit is, and how to use it wisely, is the first step to successful financial management. While the rules can vary from country to country, and even within different states and provinces, there are several ‘credit basics’ that can guide you in this process.
How do I obtain credit? [top]
Credit grantors (or lenders) include banks, credit unions, finance companies, auto leasing agencies, credit card companies and even retailers. Depending on various factors, such as your annual income and credit history, they can agree to lend you an amount of money, which you typically repay with interest. How you repay the money depends on the kind of loan you take out.
Different kinds of credit [top]
Credit cards are an example of revolving credit: the lender sets a credit limit, and you can borrow up to that limit as long as you make a minimum monthly payment. How much that payment is, depends on your agreement with the lender.
Other types of loans include installment credit such as home mortgages and car loans: the lender gives you an amount of money, which you agree to repay in fixed amounts each month over a certain period of time (called an amortization schedule).
Open credit allows you to borrow a given amount each month, which you must pay back in full each month.
Co-signing a loan [top]
You can also apply for credit with a co-signor. If you are new to credit, or have a
poor history, a co-signor may be necessary to get the approval from the lender. A married couple may also co-sign on a mortgage to get a better interest rate, for example. A co-signor agrees to be equally responsible for maintaining the loan.
If there are late payments on the loan, it will also affect the co-signor’s credit file, and if payments are missed, the lender can require the co-signer to pay. Co-signing is a serious responsibility; your financial institution can help you decide whether this is the right option for you.
Secured credit [top]
Secured loans are also an option for someone new to credit, or someone who is looking to rebuild their credit file. By asking you to put down a deposit as security, the lender reduces the risk they will lose their money. If payments on a loan are missed, the lender can recover their money by taking the security deposit. Usually a lender will ask you to put down more than the amount of credit they are giving you; this is to safeguard against extra charges that can add up, such as interest and transaction fees.
How do credit cards work? [top]
A credit card is primarily a payment tool. You can use it to make purchases of all kinds: gas for your car, groceries, services, even internet purchases. Your credit card has a unique number and expiry date. When you make a purchase, a merchant will use that number to check that you have enough money in your account, and ask you to sign a receipt for the amount of the purchase. Your credit card company later pays the merchant on your behalf.
Each month, you will receive a statement of the purchases made on your credit card
account. It’s a good idea to read your statement carefully, to make sure all the charges are yours. The statement will also show your outstanding balance, interest charges, the minimum payment due and the due date. Depending on the type of card you have, there may be other fees, such as annual fees, or cash advance fees; review the terms and conditions of your account before you use your card, so there are no surprises.
A credit card works on revolving credit: as long as your account remains in good standing, you can keep borrowing and paying back up to the credit limit set by the lender.
Interest/APR [top]
Annual percentage rates (APR), or interest rates, can vary quite a lot, depending on the type of card, the type of transaction and your own credit history. Some credit cards offer low introductory interest rates, which increases after a given period.
With most credit cards there is a grace period before your purchases start accruing interest. If you pay the entire balance owing within the grace period, then you do not have to pay interest.
If you do not pay off your balance in full each month, then interest is calculated on your purchases from the date of purchase. There are different ways of calculating interest.
One method adds up your balance each day and divides it the total by the number of days in the billing period to give an average daily balance, then multiplies it by your daily interest rate. Your daily interest rate is calculated by dividing the annual interest rate by the 365 days of the year.
Another method calculates the interest at the end of each day in the billing period by multiplying the day’s total purchases by the daily interest rate, and adding up the results for that billing period. Both methods generally yield the same amount of interest.
Payments [top]
You must make a minimum payment each month to keep your credit card in good standing. The minimum payment is usually calculated as a percentage of the total amount owing.
There are a number of different options for making payments. Many financial institutions now offer internet and telephone banking, and paying bills is just a click or a phone call away. Contact your financial institution to see how you can set up your bill payments.
If you have trouble keeping track of your due dates, you might want to consider pre-authorized payments. This allows your credit card company to take either the minimum payment, or the full balance payment, directly from your bank account. As long as you have the money in your bank account to cover the payment, this ensures your payments will always be on time. However, the drawback is that there are no ‘in-between’ payment options – if you want to pay more than the minimum, but less than the total, you will have to make the payment yourself.
Some financial institutions also allow you to pay your bills at the ATM/ABM (automated teller, automated banking machine). If you prefer to send in your payment by mail as a check or money order, make sure you leave enough time for it to arrive by the due date. Finally, you can also pay your bill at the bank teller.
Cash advances [top]
Some cards will allow you to draw cash on your credit account. Interest rates on cash advances may be higher, and there may be fees involved. There is usually no grace
period for cash advances – they start to accrue interest as soon as they’re taken out, regardless of when you pay.
Annual fees [top]
Some cards may have an annual fee for the use of the card, which may also apply
to additional cardholders. Review your card’s terms and conditions to see whether an annual fee applies to you. Some credit card companies may be willing to waive the fee if you are a good customer.
Additional features [top]
Credit cards can have any number of additional features, such as offering dividends on purchases, discounts on goods or services, travel insurance and more. Shop around to find out which features suit your lifestyle. Make sure you understand how you can collect your rewards, and whether there are any additional fees associated.
Balance transfers [top]
Some credit card companies will offer low interest rates for balances transferred from other credit cards or loans. This may be a good way to consolidate your credit card debt into a single, manageable balance. Make sure you understand the terms and conditions – in some cases, the low interest rate only applies for a short time, and increases dramatically after that.
Additional cardholders [top]
If you have been approved for a credit card in your name, you are considered the primary cardholder. Some credit card companies allow you to request copies of your credit card for family members, business associates or friends to use. They are considered secondary cardholders on the account. Additional or secondary cardholders are not responsible for maintaining the account, and normally have no power to make any changes to the account; however, they can use the additional cards issued to make purchases on your account, and can usually obtain information about the account.
Balance insurance [top]
Some credit card companies offer insurance on your credit card balance, to protect you if you are suddenly unable to keep up with your payments due to illness or job loss, for example. The premiums can be high, and they usually fluctuate with your outstanding balance. Check to see if you have another insurance policy that will pay your monthly debts if case of illness, job loss or death, before considering balance insurance.
Fraud [top]
Credit cards are vulnerable to fraud, as often all that is required to make a purchase on the internet or over the phone is the credit card number and expiry date. While new security mechanisms (such as the card verification number) are being added to prevent the fraudulent use of credit cards, remember to always protect your credit card’s information, and review your statements carefully each month to ensure all the purchases are yours. Inquire with your credit card company exactly what your liability is in case of fraud, as you may be responsible for paying for some or all of fraudulent purchases.
What is a credit file? [top]
Your credit file is essentially a report card on the kind of borrower you are. There are several agencies that create credit reports showing your history as a borrower. It contains factual information on the borrowing you’ve done in the past, and applications for credit you’ve made - including credit cards, loans, mortgages, overdrafts, retail store credit – whether you are granted the credit or not. It also shows your payment history, and personal information such as name, address and date of birth, as well as matters of public record, such as bankruptcy or lawsuits.
Each of your payments might be assigned a rating by the lender or the credit reporting agency. One typical ratings system is the North American Standard Accounts Rating, which
works on a scale of 1-9, with 1 being the highest – meaning you make your payments within 30 days of the due date. A letter will appear in front of the number, depending on the type of credit you have. ‘R’ is for revolving credit, such as credit cards, where you can borrow up to a certain limit as long as you make regular payments. ‘I’ is for installment credit, such as car loans, where you borrow a fixed amount and repay in regular installments until the loan is paid off. ‘O’ is for open credit, such as some lines of credit or overdrafts, where you can borrow up to a certain amount and repay it in full each month.
Companies such as banks, credit unions, finance companies and even retailers that lend money or extend credit, use your credit file to obtain information about you, and what kind of a risk they might be taking in lending you money. They then use this information, and any other variables they choose including information you might have provided on your application, to calculate your credit score. This acts as an indicator of how likely you are to repay your loan.
Your credit score can be calculated in a number of different ways, depending on the agency and the country they are in. Visit the top credit reporting agencies in the US, UK
and Canada and find out which one applies to you.
It’s a good idea to regularly obtain a copy of your credit file to make sure all the information is correct, and to get an idea of how you are perceived by lenders. This will allow you to take the right steps to improve your score if necessary.
How do I build a good credit score? [top]
How you use your credit can affect your ability to finance a home, a car, or obtain a business loan. Even small debts that are badly handled can leave have a negative impact on your credit file, so it’s important to learn what to do, and what to avoid.
Your credit file begins with your first application for credit. Credit cards are a typical first application, as they can be issued with small credit limits for first-time borrowers who want to start building a credit history. A new credit file will take some time to build a good score, so lenders can assess your ability to use credit wisely.
Using your credit card wisely [top]
For loans with fixed payments or terms, making your payments on time each
month is the best way to keep your credit score healthy. For revolving credit, such as credit cards, a little more care is needed to maintain a good credit profile.
Pay your balance in full [top]
While most credit card companies only require you to make a minimum payment each month, typically a percentage of the balance, it’s wise to pay off your credit card in full each month. Interest rates are usually higher than other types of credit, and this means credit cards are best used as a payment tool, rather than a loan. If you do need a long term loan, a credit card may not be the best option for you.
Keep your balance low [top]
Even if you don’t pay off your balance in full each month, there are ways you can keep a good credit profile. Don’t keep your cards near the limit, i.e., maxed out. A ‘healthy’ balance to carry is between 10-35% of your credit limit. Avoid going over your limit - if you are near your card’s limit, interest charges at the end of the month can put you over. Plan ahead by paying early.
Pay early if you can [top]
When you don’t pay off your balance in full each month, your purchases start to accrue interest from the date of purchase. Paying before your due date can avoid additional interest charges, so it’s a good idea to pay what you can, when you can.
Use your card regularly [top]
Using your card is important too. Your creditworthiness is based on how you use your available credit; letting your card collect dust does not count in your favor. If you don’t want to use your card to make purchases you can’t afford, use it for your regular purchases. Groceries, gas, maybe even monthly insurance payments – these all count as activity on your card, and by putting aside the cash to pay them off each month, you are on
your way to building an excellent credit score.
Avoid cash advances [top]
Cash advances should only be taken when strictly necessary. Lenders don’t look favorably on too many cash advances, as it is an expensive way to borrow money and reflects poor judgment on the part of the cardholder.
Don’t be a credit seeker [top]
Every time you apply for credit or a loan, or even for an increase in your credit limit, it shows up as an inquiry on your credit file. Too many inquiries throw up a red flag to lenders, that you are a ‘credit seeker’. If they are grouped within a short time frame it will usually not count against you if you are just shopping around, but it is always a good idea to limit the number of inquiries on your credit file. Shop first, and apply only when you expect to be approved. Checking your own credit file does not count against you.
Use a credit balance for large purchases [top]
Many credit cards offer distinct advantages for your purchases, such as extended warranties, insurance against loss or theft, and dividends. If you want to make a purchase that is greater than your credit limit, you can put extra money on your card beforehand, to give yourself a credit balance. This increases the amount of money available for your purchase, and can allow you to take advantage of the card’s special features.
What do I do if I can’t make my payments? [top]
Keeping up with your payments is vital to maintaining your credit score; however, you can sometimes be faced with unexpected situations that might make it impossible to stay up to date.
There are a number of recourses you can take, depending on your circumstances, but the most important thing to remember in any scenario is to act early: the earlier you take action, the more likely you are to stay in control of the situation. Debts can accumulate very quickly, and the further behind you get, the fewer options you might have.
Contact your lender [top]
If you can’t make your regular monthly payment, whether because you’ve fallen ill, lost your job, or some other disruption to your life, it’s important to let your lender know. Many lenders have a department devoted to collecting payments that are past due, and they are often willing to help get you back on your feet. If you wait until they contact you, you have less time to plan a course of action with them and the longer your payment goes unpaid, the worse it reflects on your credit rating.
Plan your recovery [top]
Depending on your situation, lenders might be willing to help you decide on a longer-term repayment plan. In order for them to help you do this, you need to be prepared by knowing what your monthly expenses and income are. Prepare a budget, and list all the necessary items, and see
what you can do to put money aside to repay your debts. If your income will be irregular, look at when you think you will be able to make payments; some lenders are willing to devise a temporary payment schedule to get you up to date, instead of a regular monthly payment plan.
If you’ve lost your job, or fallen ill, lenders might be willing to reduce your payments for a while to help get you through a rough period, lower interest rates, or even defer a payment or two, depending on the kind of loan you have, and your payment history until then.
Character counts - someone who is normally on time with their payments, and proactive if they can’t keep up, is more likely to receive help than someone who chronically falls behind.
Be honest! A clear idea of your situation is important to coming up with a viable solution, and your credit file will show your status and debts anyhow. Any dishonesty is noted, and makes lending institutions more reluctant to help you.
Finally, don’t be rude or aggressive – their willingness to help you is entirely voluntary. If your situation changes and you can’t keep up with the new plan, let them know as soon as possible. Clear and open communication is important if they are to trust you will repay your debt.
Loan consolidation [top]
Managing several different debts can be difficult, and if you fall behind on your payments, it might be a good idea to consider putting all your debts into one single loan, with a single payment. In some cases, this might even result in an overall lower interest rate or monthly payment.
It may not always be necessary to put all your loans together; look carefully at which loans are the most pressing, and which have the highest interest rates, to see how you can best benefit from consolidation.
Contact your financial institution to discuss what consolidation options are available to you. Once again, your credit score plays a big role in what choices are made available to you.
Close unused/paid off accounts [top]
If you are approved for loan consolidation, your financial institution may make it a condition to close your other loan accounts, such as credit cards, to prevent you from getting into further debt.
Voluntarily closing paid off or unused accounts is also a good idea if you are having trouble managing the debt you already have.
Credit counseling [top]
If you find yourself overwhelmed there are many agencies, both private and not-for-profit, that can help you with your budgeting and negotiating with your lender. In most cases, you make a single payment to your credit counselor, who then distributes it among your creditors. They will also act as the contact person for your lender. There may be a fee for their services.
Some lenders approve of going this route, and might be more open to reducing interest rates or extending the repayment schedule if you are receiving credit counseling.
Before signing any agreements, it’s important to look carefully at the credit counseling agency you are considering, and read over the terms and conditions. Check with your local consumer protection agency if possible to ensure theirs is a legitimate business.
Collection agencies [top]
If your payments fall too far behind, or you don’t keep your word for special arrangements with your lender, they may refer your case to an agency that specializes in recovering what are considered ‘bad debts’. Generally this will happen if your lender no longer has faith in your willingness or ability to repay your loan.
Having your file referred to a collection agency can cause serious damage to your credit rating, and impair your ability to secure credit in the future. It can also cause a great deal of stress in your life, as agencies tend to be very aggressive in their methods.
Laws governing exactly what collection agencies are allowed and not allowed to do can vary from region to region. If you believe you are being unlawfully harassed by a collection agency, contact your local law officials to find out what your rights are.
Selling your assets [top]
At any point if you fall into serious debt, you may want to consider selling some of your assets to help make your payments. Difficult as it might seem at the time, it may be worth doing to protect your reputation as a borrower.
Bankruptcy [top]
In several countries, a person who is unable to repay their debts may file for bankruptcy. Bankruptcy is a legal process which releases a person from most outstanding debts. Generally, when
you declare bankruptcy, you assign all your assets (except those exempt by law) to a trustee,
who then sells them and distributes the proceeds among your creditors. Lenders can no longer take legal action against you to recover any remaining debt.
Bankruptcy should only be considered as a very last resort, as it can have serious repercussions on many aspects of your life. The effects of a bankruptcy can last for years, making it difficult to own property, or obtain credit of any kind.
Since the laws governing bankruptcy vary from region to region, consult with your local legal authorities to find out how the process might apply to you.
Links [top]
United States
Credit Information for Consumers
Canada
Credit Information for Consumers
United Kingdom
Credit Information for Consumers
[Go to Top of Page]
Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A [top of glossary]
additional/secondary
cardholders: Most credit card companies allow you to sign on additional
cardholders such as a family member to your credit card account.
You are liable for any purchases they make.
amortization: Payment of debts
in regular installments over a period of time.
annual fee:
Some credit cards may have a yearly fee in addition to any interest
charges for purchases.
annual income:
The amount of money you earn in a year. This is used to assess
your eligibility for a loan, and the amount.
annual percentage
rate (APR): the annual rate of interest charged on money borrowed;
also known as interest rate. This is the cost of borrowing money.
assets: Something
of financial value owned by a person or business. These can be
used as security on a loan, repossessed in some cases such as of defaulting
on car loan payments, or used to pay back creditors in the case of bankruptcy.
ATM/ABM:
Automatic teller machine/automatic banking machine.
B [top of glossary]
bad debt: A loan
that has fallen very far behind which lenders consider unlikely to be
repaid.
balance:
The total amount owing on a loan.
balance insurance:
Insurance is sometimes available on loans, particularly credit cards,
to cover in case you are unable to maintain your monthly payments due
to illness, accident or job loss.
balance transfer:
Transferring the money owing on one credit card to another. Some
credit cards offer lower or deferred interest on balance transfers,
as a way of wooing your business.
bankruptcy:
A legal proceeding in which a person is released from all outstanding
debts.
billing period:
The time period (usually one month) for which purchases and any other
applicable charges are added up. Lenders will typically issue
one statement for each billing period, showing purchases, interest charges,
other charges, and payments due.
budget: A financial
plan showing how much money is spent and how much money is coming in.
A budget is a useful tool for managing debt.
C [top of glossary]
cardholder agreement:
An agreement between a credit card user and the issuing agency outlining
the cardholder’s responsibilities.
card verification
number: A three-digit number on the signature panel at the
back of the credit card, following the credit card number. This
number is used for security verification to make sure the person using
the card actually holds the card, in case of stolen credit card numbers.
car loan:
Many car dealerships will offer financing on the purchase of new cars.
These are loans that function like any other, and are generally held
by a bank or other lending institution.
cash advance:
Credit cards can be used to take out cash, as well as make purchases.
Cash advances are almost always charged interest from the date they
are withdrawn until they are paid off; sometimes they are charged a
higher rate of interest. Cash advances should be used in emergencies
only as they can negatively affect your credit rating.
collection agency/third
party collection agency:
When a loan goes unpaid for a long time, lenders may refer the case
to a third party, collection agency. These agencies are paid a
fee to recover unpaid loans.
consumer statement
: A brief statement by the consumer that can appear on their credit
file; it can be used to explain an incident in the credit history, for
example.
co-signor:
A person who agrees to share equal responsibility for a loan.
Co-signors can be useful if you need a larger loan such as a mortgage,
or if you have a poor or new credit history.
credit balance:
A positive account balance on a credit card account. Purchases
made with credit balances cannot be charged interest as it is your money,
not borrowed money. This can be useful for making large purchases
if your credit limit is too low.
credit counseling:
There are many agencies, whether not-for-profit, governmental or private,
that offer financial counseling. Credit counseling agencies can
help to arrange long-term repayment plans with your lenders.
credit file/credit
report: Your
credit payment history is recorded in a file or report. The report
includes personal information (name, address, date of birth, employer,
etc.), credit information (loans, mortgages, etc.), banking information
(bank accounts, non-sufficient funds warnings, etc), public records
(bankruptcy, lawsuits, etc.), collection information (whether a loan
you owed was referred to an agency for collection), and inquiries about
your credit history. These files or reports are maintained and
sold by credit-reporting agencies.
credit grantor:
See lender.
credit history:
The history of your loan repayments, contained in your credit file.
credit limit:
The maximum amount of money a creditor will lend you on a particular
account, such as a credit card.
creditor:
see lender.
credit rating:
Some credit reporting agencies will assign a rating system of 1-9 to
your payment history to indicate how timely your payments are.
credit reporting
agencies: Agencies that collect information for your credit
file. This information can be obtained with your permission.
credit score:
Lenders and credit reporting agencies can assign an overall score (calculated
any number of ways) to indicate your behavior as a borrower.
D [top of glossary]
daily
interest rate:
The annual interest rate divided by the number of days in the year.
Used to calculate monthly interest charges.
debt:
Any money owing.
debt/loan
consolidation: Taking out a single loan to repay several smaller
loans. This can make monthly payments easier to keep track of,
reduce overall interest rates, or even reduce the total amount outstanding.
debt
reduction:
Some lenders will consider reducing the amount of money owing on a loan
as part of a repayment arrangement.
debtor:
A person who owes money.
dividend:
Some credit cards will offer cash back, or dividends, on purchases as
part of a rewards program.
due date:
The date by which a minimum payment is due.
E [top of glossary]
expiry date:
The date until which your credit card remains valid. The expiry
date is usually required along with the credit card number for purchases.
F [top of glossary]
G [top of glossary]
grace period:
The time granted to pay off a balance in full, to avoid interest charges.
Certain conditions may apply.
H [top of glossary]
I [top of glossary]
inquiries:
A request for information from your credit file.
installment credit:
A type of loan where the money is borrowed once, and repaid in fixed
amounts over a specific period of time, such as a mortgage or a car
loan.
interest-free period:
Some credit cards offer an incentive where interest is not charged on
purchases or balance transfers for a given period of time.
internet banking:
Many banks allow you to access and manage your bank accounts, including
loans and credit cards, over the internet. Contact your bank for
further details.
introductory interest
rate: Some credit cards initially offer a lower rate of interest
on purchases and/or balance transfers. Note carefully when normal/higher
interest rates begin to apply.
J [top of glossary]
K [top of glossary]
kiting:
Using one credit account to make payments on another.
L [top of glossary]
late payment:
Any payment made after the due date. Typically, only those payments
that are more than 30 days late will be reflected on your credit file.
Lender (also creditor,
credit grantor): Any group or institution that lends money.
Includes banks, financing companies, auto leasing companies, credit
card companies, retailers, etc.
line
of credit:
A revolving credit account, which can be continuously drawn on up to
a fixed amount.
loan:
An amount of money borrowed that must be repaid.
loan consolidation:
When several smaller loans are paid off with a single, larger loan.
This allows you to reduce the number of monthly payments, and may also
result in an overall lower rate of interest.
M [top of glossary]
minimum monthly payment:
The minimum amount that must be paid each month on a credit account.
This can be a fixed amount, or set as a percentage of the total amount
owing.
mortgage:
A lien or claim against real property, such as a house, which is used
as security for money borrowed. Failure to maintain payments can
result in the house being repossessed.
N [top of glossary]
North American Standard
Account Ratings (R0-9): A rating system for individual payments
on a scale of 1-9, where 1 mean a bill has been paid within 30 days
of the due date, and 9 means a bill has not been paid, and has been
written off or sent for collection.
O [top of glossary]
open credit:
A line of credit that may be used repeatedly up to a certain amount.
outstanding balance:
The total amount owing at any given moment.
overdraft:
A form of credit on a bank account
P [top of glossary]
payment deferral:
In some circumstances such as severe illness or job loss, lenders might
be willing to push back one or more payments on a loan or credit card,
to give you time to recover.
payment history:
The record of all your payments, including whether they were paid late
or on time.
penalty interest
rate: Some credit card companies may charge higher interest
rates for some situations, such as late payments. Review the terms
and conditions of your account carefully to see what conditions apply.
pre-authorized payment:
You can often authorize your lender to automatically withdraw monthly
payments directly from your bank account, for either the minimum payment
or full balance outstanding.
primary cardholder:
The person responsible for making payments on a credit card account.
prime rate:
The prime rate of interest is a rate of interest that serves as a benchmark
for most other loans in a country.
Q [top of glossary]
R [top of glossary]
repayment plan:
An agreement between you and your lender to bring a delinquent account
up to date over an extended period of time.
revolving credit:
Credit that is automatically available up to a predetermined amount
as long as regular payments are made.
reward program:
Additional incentives offered by credit card companies to win your business;
can include any number of ‘extras’ such as dividends, air miles,
car rental insurance, and more.
S [top of glossary]
secured loans:
Loans that have some kind of collateral offered as security, such as
a house or a car.
security deposit:
If your credit history is poor, or very new, credit card companies may
require you to place a given amount of money in a bank account as security
for the credit card account. This can be useful in rebuilding
a damaged credit score.
seizure of assets:
In case of non-payment, assets such as a house or car offered as security
for a loan may be taken by the lender in lieu of payment.
statement:
A monthly report of activity on an account, including purchases/withdrawals,
payments, interest and other applicable charges, payments due and due
date.
T [top of glossary]
terms and conditions:
The full set of rules by which the lender and borrower agree to abide.
You should always review the terms and conditions of any credit account
carefully beforehand.
transaction fees:
Separate fees may be charged for certain transactions on a credit account,
such as cash advances.
U [top of glossary]
V [top of glossary]
W [top of glossary]
write-off:
If a credit account has not received any payments for several months
(typically 120 days) the account may be referred to a collection agency,
or if it for a small amount, it will be written-off, which means the
lender no longer expects to recover the money. Write-offs are
reflected in your credit history.
X [top of glossary]
Y [top of glossary]
Z [top of glossary]
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