Credit Glossary
- Charge Off - means that a creditor has decided to treat an account receivable (or debt) as a loss because payment is unlikely. Basically the creditor will charge off a debt when it has given up in collecting a debt. A creditor usually sells a charged off debt to a third-party collection agency to recoup some of its loss. This results in both the original creditor and the collection agency reporting negative items on a person's credit report.
- Default - the failure to pay a debt when due, or honor a contractual obligation.
- Default Judgment - a judgment entered against a defendant who has failed to plead or otherwise defend himself against a creditor's lawsuit.
- FCRA - Fair Credit Reporting Act. These laws govern credit reporting.
- FDCPA - Fair Debt Collection Practices Act. These laws govern collection agencies in the collection of debt.
- Garnishment - a proceeding where a court orders a third party (e.g. bank or employer) to withhold a debtor's property in order to satisfy a debt. Garnishment can occur either before or after a creditor obtains a judgment.
- Inquiry - An inquiry is an entry on your credit report showing that a business has requested your credit report for a "permissible purpose" e.g. for a loan, credit card, insurance, etc. "Hard" inquiries may lower your score, while "soft" inquiries have no effect on your score.
- Judgment Lien - A judicial lien, or judgment lien, arises out of a proceeding in court. A judicial lien establishes a creditor's right in a debtor's property and allows the creditor to proceed (take) a person's property to satisfy a debt.
- Repossession AKA "Repo" - repossession is the act of retaking property, i.e. the seller's retaking goods when sold on credit. A repossession is usually associated with a bank's retaking an automobile when the buyer defaults on the auto loan.
Quick Credit Repair Option?
In the event you elect to have a credit repair company perform your work, the Lexington Law Firm is second to none. Their attorneys specialize in eliminating all kinds of negative credit information including bankruptcy, foreclosure, judgments, charge offs, etc.