adminCredit bureau: A company that is licensed to collect and compile information about your financial behaviour. The information comes from a variety of credit granting sources as well as public records information. In turn, they sell the information, in the form of a credit report, to those authorised to obtain it.
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Credit counselling: Professional guidance, assistance, and counselling provided by organisations that help consumers find ways to repay their debt – through careful budgeting and management of money. Credit counselling agencies negotiate with creditors and advocate for interest relief for individual debtors when they believe it is appropriate to do so.
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Credit Rating: An evaluation of the likelihood of a borrower to default on a loan. Credit reporting companies provide information about your financial behaviour to lenders to help them decide whether or not to lend you money. The information may include your payment history, a list of current and past credit accounts and their balances, employment and personal information and a history of past credit problems.
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Credit report: A summary that provides information to potential lenders of the risk involved in extending credit and the probability of repayment. It is created when you start to apply for credit. Contains personal information, to whom and how often you apply for credit, how regularly you make payments and public records (court judgements). Each lender gives you a rating depending on your “performance” with them.
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Debt settlement: Repaying a debt for an amount less than originally owed after a lower repayment amount is negotiated. This typically requires a lump sum of money to pay off or settle the debt once an amount is settled on. Some for-profit companies try to persuade people to enter a debt settlement program with monthly payments.
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Compound interest: Compound interest can make the cash you invest or deposit into an interest-bearing account grow — and it can also make your credit card balance tough to pay down. It works by calculating interest on the initial principle balance and then on subsequent accumulated interest.
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