Been steamed, reamed

& dry cleaned?

Been lied to? Robbed? Misled?

This is the place to fight back

& learn your rights or get

he best comprehensive service

for about $1.90 a day!


tour

Glossary of credit terms, mortgage

and other boring shit we spruced up.

Education should always be stimulating. Let's face it, credit terms, credit repair terms, dispute jargon and mortgage wording is boring. From what we can see, it has not been updated since the 1960's. So, with our satirical way of seeing things we decided a glossary style listing of terms needed to be added.

The information contained in this section is real, the way we describe it wholly colorful. Be warned.

Agency Terminology

Credit Reporting Agency (CRA)

A CRA is another word for a Credit Bureau. There are about 40 CRA's in the industry, the ones most banks deal with are TransUnion, Experian and Equifax. They collect data and sell data to lenders and other interested parties. ChexSystems is one of those above mentioned 40 CRA's but it usually does not contain credit items rather it deals directly with debts owed to banks.

Creditor (the dudes you owe)

Creditor is another name for lender, i.e., the entity you owe money to either in the form of a loan or credit item. Creditor is the same as lender but not all lenders are creditors. Whatever. These are the people you owe. Another way of saying it would be lender/borrower.

Debtor (If you are reading this, it's You)

A debtor is you. If you owe any lender money, you are in debt to them. Makes sense don't it.

Lawsuit/Garnishment (AKA oh shit)

Creditors can sue for recovery and most do when the amount owed is significant to a collector. This has nothing to do with the removal of an item, since people can get sued for items that have been removed from a credit report. Garnishment requires a court order.

Judgement (Ordered by a judge to pay up)

If a creditor sues you for a debt and you lose, a judge can order a garnishment of wages to satisfy the debt. This comes straight out of your paycheck. Garnishment usually only applies to wages since unsecured credit accounts can not come after assets and such.

Summons (AKA I'm gonna hide out)

When a collector sues a debtor gets hit with either a summons to appear or other paperwork from a court outlining the issue. Most people hide out or otherwise evade the process server (they person who delivers the court documents). Not showing up is an option but not the best one. Usually a no show is automatic grounds for the creditor to win.

Lien

Secured credit such as loans secured with property are known as liens. If a borrower places their property on the line when taking out, say, a $50K loan and then defaults on payments. The bank can argue for the property and sell it to satisfy the loan balance plus other fees.

Settlement

A negotiated payment agreed upon where an amount is paid in part to either the original creditor or the collection agency/debt buyer. Settlements are good but the best would be an agreement to delete upon payment so that way the negative history does not show on a report. As hard to swing as an orgy (unless you live is San Francisco) but it's always worth to ask.

Account Status

Indicates whether an account is open or closed. The status may include a note such as "included in bankruptcy", "closed", "paid in settlement" or the ever popular "This guy didn't pay me so fuck him". Ok, that last one won't show on a report but not for a lack of trying.

Balance (what you owe)

A balance is what is owed on any specific account. Charge offs and closed accounts can have balances on them. This is money owed regardless of account status.

Public record

A record filed on a credit report that holds a public interest. bankruptcies and evictions are some of the types of public records that show up on a report. Garnishment will not show but some types of liens will.

Consumer Credit File (Credit Report)

A fancy way of saying credit report. All credit reports are consumer credit files as held by specific credit bureaus. Not all files will ever match. It depends on who your lender reports payments or delinquencies to.

Credit Limit (let's spend this shit, man)

The limit available on a specific account. All bullshit aside, one should never exceed their credit limit as it drops a score big time. Always use between 20 and 30% of any available limit. Pay diligently.

Inquiries (AKA investigations)

Any hard copy request of a credit report will create an inquiry. They stay for 2 years from the moment applied but do not count towards the score after 12 months. Inquiries for extensions of available credit limits last 1 year. Too many are seen as a problem. Apply sparingly.

Hard Vs. Soft pulls (get your mind out of the gutter)

A hard pull is jargon for a hard inquiry. A soft pull is jargon for an inquiry that does not produce an inquiry. Only a consumer can see a soft pull, creditors cannot. Hard pulls everyone can see. Insurance quotes and the like result in soft pulls.

Revolving Vs. Instalment

A revolving account is a credit card account where the spending limit is established and  revolves as payments are made. In other words you can re-use the money in a revolving account. An installment account is usually seen when an auto loan is taken out. A payment is made on instalment until payment is fulfilled but you can not use the money paid.

Promotional block (kinda like a cock block but for finance products)

Placing a promotional block will eliminate you from receiving credit card offers or other such financial products.

Credit Score

A numerical value given to a persons file to rate creditworthiness. The score does nothing more that track your mix of accounts, age of accounts, utilization and payment history. More than this goes into a score but we aren't told exactly what. Who cares? All you have to do is maintain as best you can and never go on spending sprees or benders unless you live in Vegas.

Mortgage related terminology


2 percent rule

Jargon used for refinancing loans. Means that one should always try to go for a minimum two percentage points. Factors uh, factor into this so get that straight first.

Adjustable rate Mortgage (ARM)

A arm is an extension of the body. Usually it it ends in a hand, a hand you can use to slap yourself across the face. Ok, an Arm is actually a type of mortgage where the interest varies.

Amortization (reminds us of A Mortadella)

This is the reduction of principal that takes place as loan is paid down. Has nothing to do with cold cut meats. Talk to your mortgage pro about this, make sure you don't call them a mortadella or a gabagool.

Annual Percentage rate (APR)

The actual cost that is paid to borrow given as a yearly amount. AKA effective borrowing cost or the ever popular "I'm gonna get screwed here". Maybe, maybe not. Basically APR means a cost is built into a loan. If you take on an auto loan for 20K and put down 1K, the actual amount you are borrowing is 19K but you would owe the full 20K (sounds fun eh? Welcome to the wonderful world of the house never loses financing)

Applicable Exclusion Limit (AEL)

The value of your estate that is exempt of estate taxation. Oh hell, my eyes just crossed.

Appreciation

Increase of value given. Measured as percentage or dollars or a combination of both.

Bankruptcy

The end of the line. bankruptcy releases a person from debt legally but it is the last resort, as it does for a credit report and score what Roseanne Barr does to a buffet. Only a buffet gets shut down forever and a bankruptcy shuts you down for between 7 and 10 years.

Bi Mortgage

Don't be immature, That's not what this means. This is BI as in Bi-weekly. A mortgage paid every 15 days as opposed to every 30. Supposed to save you on interest, if you have the beaucoup cash I say go for it.

Capital Gain

An increase in value on property owned. The IRS sees it as anything at all from property to items in a home. Maybe even that mint condition Boba Fett action figure or that Millennium Falcon. I had one. had I kept it I'd be able to buy an island. Damnit.

Cost Benefit Analysis

An analysis or comparison of different alternatives designed to see the if the benefit outweighs the cost. Think of it like this: You wanna hit a strip club, and need to know which club will get you the best bang for your buck. Harriet the handmaiden or Valentina with the triple rack. Yeah we said it.

Counteroffer

Everyone knows what this means. But it could also be applied to a strip club. Say you want a champagne room and 3 girls to cavort all over you and call you Big Rudy. The dancer listens and says it can happen for $2k. A counteroffer would include you laughing and telling her that your mom only lets you spend 1K. This can go on forever, be prepared to leave to make your point, but leave slowly so she has time to accept.

Credit Risk

The likelihood that a debt will be paid back. Generally speaking interest and scoring come into play with risk. A lower score is usually a higher risk but not always. Someone can have a great score but the age is not so great and thus the risk will still be high. Who knows.

Debt ratio

Used by lenders to grant approval to loan applicants. Debt ration is equal to a combined monthly debt in payments by the gross monthly income of the borrowers. My eyes cross too, talk to a mortgage pro, we aren't it.

Equal Credit opportunity Act (ECOA)

Federal Law which prohibits discrimination in credit or lending. Part of the Consumer Credit Protection Act. Tittle VII to be exact.

Equity

Value in dollars built up in a house or other property that represents current market value minus any remaining balance of mortgage payments.

For Sale By Owner (FSBO)

A sale cutting out a realtor or broker. No middlemen would be the way to phrase it, oh excuse me, no "middleperson" for you SJW candy ass types that think everything is sexist.

Home Equity Loan (AKA the "be careful here")

Similar to the HELOC (Home Equity Line of Credit) is a loan that allows homeowners to borrow against the equity in their home for improvements to the home or just to get the full body transformation complete with Botox. Whatever, we don't judge. Just be careful.

Loan Principal, Interest, Property taxes (P.I.T.I.)

An acronym for a really long set of words. Also, we P.I.T.I. anyone who goes into the home buying game without a really good mortgage pro. Just sayin'.

Co-Borrower

This describes your roommate when he takes your car without telling you he's going on a bender and brings it back 4 days later smelling of weed and stale beer and of course, with no gas. Ok, that's not what it really means (but it could). A co- borrower is a borrower whose income to qualify a loan. Their name will appear on the legal documents/deeds and shared legal obligation is to be expected.

Foreclosure

The legal process in which property is sold to pay off a defaulted debt. Not the worst fuck up on the planet but pretty close. Everyone knows the worlds worst fuck is me having hooked up with my ex. Shit happens.

Hazard Insurance

Insurance taken out to compensate loss for specific reasons, like flood or fire. Wish there were hazard insurance for doing stupid shit like eating 2 racks of ribs and downing a pitcher of ale and waddling home like a duck because you forgot where you parked your car and tipped the waitress your keys.

High Ratio Loan (AKA How fucked are we?)

Mortgage loans exceeding 80% of loan amount divided by the lower sales price at time of purchase.

Rate lock

Interest rate lock is a temporary guarantee that a rate quoted will not suddenly change while you're getting your shit together. Helps guard against interest rate changes. Incurs a fee and normally lasts 30 days.

Late payment

The shit one does not want to do.

Percentage point

A measurement of interest.

Planned Unit Development (PUD)

Phrase used to describe combined usage of land. Could also describes what one "pulls" when one is being lazy or uh, self recreating. Let's move on.

Non conforming loan

Loans that Fannie Mae or Freddie Mac do not buy because the loan amount is excessive or fall outside of the normal underwriting process.

Origination fee

Fee charged for handling loan applications or other related services in processing of loan or financial products. Is not exclusive to mortgagees but is commonly heard in this field.

Living will

Legal document created and executed while you are alive that outlines your wish to be kept alive by artificial means. Listed in Mortgage terminology but applies to many things, including having to watch reruns of Full House because the cable is out again and you are so over YouTube.

Margin

Fixed amount added by a lender to the base rate of an ARM (Adjustable rate mortgage). This sets the rate on a loan.

Principle Balance

Money owed which does not include interest payments.

Purchase Contract

The legal agreement between buyer and seller which will include terms of sale and other important information. Sales contract is another way of saying purchase contract.

Scoring model

Statistical formula which is used to estimate the performance or likeability of a prospective borrower (existing customer) to repay a loan or other financial product back at interest. Scores cull data from credit reports but are handled by outside analytics companies.

Section 529

Outlines a tax advantage plan operated by the state (could also be a school) which puts money aside for a child's educational expenses. In my family we had piggy banks and mayonnaise jars, this would be the more advanced option. Ahem.

Social Security taxes

Pays into Medicare & Disability insurance and the like. Those dedications on your pay stub go to you later so don't begrudge them.

Surveyor

Person that comes to your house and describes the land in minute detail with funny scopes and gizmos and stands there looking rather serious while they do it, while you scratch your ass and wonder how you can get in on such a lax job.

Truth In Lending Act

Consumer protection law requiring lenders to disclose all costs associated with loans including the actual interest rate and payments you will need to make over the span of the loan.

Title

The legal proof of ownership. You did it, go on with your bad self.