Credit Insurance—Health, life, accident, or disruption of income insurance designed to pay the outstanding balance on a debt.

 

Credit-Scoring System—A statistical system used to rate credit applicants according to various characteristics relevant to creditworthiness.

 

Creditworthiness—Past, present, and future ability to repay debts.

 

Debit Card (EFT Card)—A plastic card, which looks similar to a credit card, that consumers may use at an ATM or to make purchases, withdrawals, or other types of electronic fund transfers.

 

Default—Failure to repay a loan or otherwise meet the terms of your credit agreement.

 

Disclosures—Information that must be given to consumers about their financial dealings.

 

Finance Charge—The total dollar amount credit will cost.

 

Grace period—This is the time between the date of the credit card purchase and the date the company starts charging you interest.

 

Home Equity Line of Credit—A form of open-end credit in which the home serves as collateral.

 

Identity theft—Identity theft involves someone else using your personal information to create fraudulent accounts, to charge items to another person’s existing accounts, or even to get a job.

 

Joint Account—A credit account held by two or more people so that all can use the account and all assume legal responsibility to repay.

 

Late Payment—A payment made later than agreed upon in a credit contract and on which additional charges may be imposed.

 

Lessee—The party to whom the item is leased. In a consumer lease, the lessee is you, the consumer. The lessee is required to make payments and to meet other obligations specified in the lease agreement.

 

Lessor—The person or organization who regularly leases, offers to lease, or arranges for the lease of the item.

 

Liability on an Account—Legal responsibility to repay debt.

 

Open-End Credit—A line of credit that may be used repeatedly, including credit cards, overdraft credit accounts, and home equity lines.

 

Open-End Lease—A lease agreement in which the amount you owe at the end of the lease term is based on the difference between the residual value of the leased property and its realized value. Your lease agreement may provide for a refund of any excess if the realized value is greater than the residual value. In an open-end consumer lease,