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Glossary

2-1-1.org

2-1-1 is an easy-to-remember three-digit telephone number meant to provide information and referrals to health, human and social service organizations. Health and human service information can also be accessed on the 2-1-1 website, www.211.org

30/60 Day Notice to Vacate

A notice from a landlord to a tenant to vacate the premises. Some states allow landlords to give tenants 30 days notice, while other states require 60 days. If a tenant fails to vacate the premises within 30 or 60 days of the landlord’s notice to vacate, the landlord may bring an unlawful detainer or eviction suit, and a court may order the tenant to vacate.

account balance

The total amount of money owed to a third party such as a credit card company, utility company, mortgage banker or other type of lender or creditor.

adverse action

An action that denies an individual or business credit, employment, insurance or other benefits. An adverse action is generally taken by a business or government based on a criminal past or information found in credit reports.

alternative financial services

a term used to describe the array of financial services offered by providers that operate outside of federally insured banks and credit unions.

Annual Credit Report.com

Annualcreditreport.com is the official website to get a free credit report. The site is maintained by Central Source, LLC, which is sponsored by Equifax, Experian and TransUnion. It provides a single site where you can download credit reports from all three companies.

application fee

Rental application fees are used to pay for a credit check and any other tenant screening processes the landlord requires.

ATM withdrawl

Cash withdrawl from a savings or checking account via an electronic banking outlet, which allows customers to complete basic transactions without the aid of a branch representative or teller.

auto loan

An auto loan is a loan used to finance the purchase of an automobile. It is usually unsecured and based on the borrower’s integrity and ability to pay.

auto transfer

An automatic transfer of funds between customer accounts. For example, a regular transfer from a checking account to pay off a bank loan, or a monthly transfer from a checking account to a savings account.

automatic bill pay

Routine payments made from a banking, brokerage or mutual fund account to vendors.

available credit

The difference between the amount of the credit line or limit, and the amount that has already been borrowed. Available credit is considered readily available for withdrawal or for direct purchases.

Bank

A bank is an establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.

bank account

An account maintained by a financial institution for a customer. The account represents the funds that a customer has entrusted to the financial institution and from which the customer can make withdrawals. Alternatively, accounts may be loan accounts in which case the customer owes money to the financial institution.

Bank account balance

The amount of money in a financial repository, such as a checking account, at any given moment.

Bank account garnishment

Bank account garnishment is a technique that is used to recover money from people with substantial outstanding debts. Garnishment occurs after a legal judgment against the debtor occurs, and is done by issuing a bank with a court order that forces them to freeze a debtor’s account or accounts, and to withdraw enough funds to satisfy the legal judgment. If the debtor’s account does not contain enough money to satisfy the judgment, he or she will be liable for the remaining balance.

banking history report

A report of your previous banking activity that is generated by a consumer credit reporting agency such as ChexSystems, TeleCheck, or Early Warning Systems.

bankruptcy

Bankruptcy is a generalized term for a federal court procedure that helps consumers and businesses get rid of their debts and repay their creditors. Among the different types of bankruptcies, Chapter 7 and Chapter 13 proceedings are the most common for individuals and businesses. Chapter 7 bankruptcies take and sell any property or assets you might own in order to pay back your debts. Chapter 13 bankruptcies allow you to keep your property, but you must submit and stick to a plan that will allow you to repay some or all of your debts within three to five years.

bounced check

A “bounced check” is slang term for a check that cannot be processed because the writer has insufficient funds. A bounced check will often be returned to the writer along with a penalty fee for non-sufficient funds.

business loan

A loan specifically intended for business purposes. As with all loans, it involves the creation of a debt, which will be repaid with added interest.

canceled check

A canceled check is a check that has cleared the depositor’s account and has been marked as “canceled” by the bank. A canceled check has been paid by the drawee bank and endorsed by the payee, the payee’s bank, and the Federal Reserve Bank.

car title loan

A short-term loan in which the borrower’s car title is used as collateral. The borrower must own the car outright. Loans are usually for less than 30 days. Borrowers must temporarily surrender the hard copy of their vehicle title in exchange for a loan amount. When the loan is repaid, the car title is returned to its owner. If the borrower defaults on their payments then the lender is liable to repossess the vehicle and sell it to repay the borrowers’ outstanding debt.

Career One-Stop Centers

One-Stop Career Centers are designed to provide a full range of assistance to job seekers under one roof. Established under the Workforce Investment Act, the centers offer training referrals, career counseling, job listings, and similar employment-related services.

cash flow budget

An estimation of the cash inflows and outflows for a specific period of time. Cash flow budgets are often used to assess whether the entity has sufficient cash on hand to meet expenses.

cashier's check

A check guaranteed by a bank, drawn on the bank’s own funds and signed by a cashier. Also known as a bank check.

Catholic Charities

A network of more than 160 local non-profit agencies nationwide that work to reduce poverty in America. They provide services housing, health care, disaster relief, and other services to millions of people annually.

certified mail

Certified Mail allows the sender proof of mailing via a mailing receipt and, upon request electronic verification that an article was delivered or that a delivery attempt was made. The return receipt is a green postcard-sized paper that is mailed back to the sender by the post office upon receipt by the addressee as proof of delivery.

Charge Card

A card that charges no interest but requires the user to pay his/her balance in full upon receipt of the statement, usually on a monthly basis.

Charge-off

A charge-off is the declaration by a creditor that an amount of debt is unlikely to be collected. This occurs when a consumer becomes severely delinquent on a debt. The creditor considers the remaining balance to be bad debt, but borrowers are still obligated to repay the outstanding debt. After an account is charged off by the original lender it is usually sent to a collection agency. The collection agency will then attempt to recover the remaining amount and potentially additional interest and fees.

check

A written order directing a bank to pay money as instructed.

check casher

A company that will cash a check for a fee. The fee is generally a percentage of the amount of the check that is cashed.

Checking account

A checking account is a deposit account held at a financial institution that allows for withdrawals and deposits. Money held in a checking account can be withdrawn using checks, automated cash machines and electronic debits, among other methods.

ChexSystems

ChexSystems is a check verification service and consumer credit reporting agency owned by a subsidiary of Fidelity National Information Services. It provides information about the use of deposit accounts by consumers.

Child and Dependent Care Tax Credit

A non-refundable tax credit for unreimbursed childcare expenses paid by working taxpayers. The Child and Dependent Care Credit is designed to encourage taxpayers to pay childcare expenses so that they can remain gainfully employed.

Child Tax Credit

A nonrefundable credit that reduces the taxpayer’s liability on a dollar-for-dollar basis. The Child Tax credit is intended to provide an extra measure of tax relief for taxpayers with qualifying dependents.

co-signer

The act of signing for another person’s debt. The co-signer is legally obligated to make payment on the other person’s debt should that person default.

collateral

Something of value, like a home, boat or car that is pledged as security for repayment of a loan, to be forfeited in the event of a default.

collections

The process of recouping a debt that is delinquent or past-due.

community action agencies

Non-profit organizations that provide services, assistance, and other activities designed to eliminate poverty.

community resources

Cash, goods, or services provided to qualifying members of a community, but generally those experiencing financial hardship, whether long-term or temporary.

community-based organizations

A community-based organization is a public or private nonprofit that is representative of a community or a significant segment of a community, and is engaged in meeting human, educational, environmental, or public safety needs.

consumer reporting agency

Consumer reporting agencies collect information and provide reports to other companies about consumers. Companies use these reports to make decisions about providing credit, employment, residential rental housing, and insurance.

credit building loan

A combination loan and savings program that helps to establish a good payment history and increase one’s credit score. Credit building loans place the money you borrow in a certificate of deposit (CD) that earns interest. The borrower makes monthy principal and interest payments to repay the amount borrowed. After the final payment is made, the borrower can withdraw the funds or leave them invested in a CD.

credit bureau

An agency that researches and collects individual credit information and sells it for a fee to creditors so they can make a decision on granting loans.

Credit card

A short-term borrowing instrument that allows a customer to make a purchase now and pay later, normally with interest and fees. The credit card issuer sets a maximum limit that can be charged. Borrowers make monthly payments on the amount charged to the account, as well as on the interest that is charged by the issuer. When payments are made, those funds become available for borrowing again. Credit cards are considered a form of revolving credit since the amount borrowed fluctuates and is not repaid in a set number of payments.

credit card billing cycle

Credit card companies define billing periods or cycles to figure out how to issue bills and charge interest. The billing cycle has a specific number of days with a closing date that ends the billing cycle. After the closing date of one billing cycle, the next one begins. Credit card companies use the beginning and closing dates of a billing cycle to calculate interest on a balance.

credit check

The process of evaluating an applicant’s loan request in order to determine the likelihood that the borrower will repay his debt.

credit history

A credit history is a record of a borrower’s responsible repayment of debts.

Credit inquiry

A transaction where a bank or other credit-issuing institution views an individual’s credit report. The purpose of a credit inquiry is to evaluate an individual’s likelihood to repay money that is lent to them. There are two main types of credit inquiries - a “soft” inquiry and a “hard” inquiry. A soft inquiry is normally initiated by an individual (such as checking one’s own credit report for errors) and is not recorded on the individual’s credit report. A hard inquiry is recorded on an individual’s credit report when a third party views the credit report in response to an application for credit.

credit limit

The maximum amount of credit that a financial institution or other lender will extend to a debtor. Sometimes called a credit line, line of credit, or a tradeline. Credit limits are usually determined based on information contained in the application of the person seeking credit, or that person’s credit rating.

Credit report

A credit report is a document supplied by a bank or a credit reporting agency that summarizes an individual’s credit history and present financial position, including any pending judgment(s) against the individual.

credit reporting agency

Credit reporting agencies are businesses that maintain historical information pertaining to credit experience on individuals or businesses. The data are collected from various sources, most commonly firms extending credit such as credit card companies, banks and credit unions.

Credit Score

A credit score is a numeric expression of a person’s creditworthiness that is used by lenders to assess the likelihood that a person will repay his or her debts. It is based on a person’s past credit history and ranges from 300 to 850. The higher the number, the more creditworthy the person is deemed to be.

credit terms

Terms offered by the credit issuer to the applicant that control (1) the monthly and total credit amount, (2) maximum time allowed for repayment, (3) discount for cash or early payment, and (4) the amount or rate of late payment penalty.

Credit Union

A credit union is a non-profit, member-owned financial institution. They are created and operated by members, who can borrow from pooled deposits at low interest rates.

credit utilization rate

The percentage of a consumer’s available credit that he or she has used. It is calculated by adding together the outstanding balances of all one’s credit cards and then dividing that amount by the sum of each card’s limit.

Criminal conviction

A finding by a judge or jury that a person is guilty of a particular crime or charge. This judgment can come by way of a plea of guilty or a finding after a trial.

Cure or Quit Notice

A notice to cure or quit is issued by a landlord when a tenant performs actions in violation of a lease. The notice gives a tenant the option of either fixing the offending problem or vacating the rental property.

current debt

The portion of all total debt that must be paid within a year.

debit card

A card issued by a bank allowing the holder to transfer money electronically to another bank account when making a purchase.

debit transaction

A withdrawal of funds from an account, such as a cash withdrawal, bill payment or fund transfer.

debt trap

A situation in which a debt is difficult or impossible to repay, typically because high interest payments prevent repayment of the principal.

debt-to-income ratio

A personal finance measure that compares an individual’s debt payment to his or her overall income. It is calculated by dividing all monthly debt payments by monthly gross income.

deduction

Any item or expenditure that is subtracted from gross income to reduce the amount of income that is subject to tax.

deed-in-lieu of foreclosure

A potential option taken by a borrower to avoid foreclosure under which they deeds the property back to the lender in exchange for the release of all obligations under the mortgage.

defined benefit plan

A defined benefit plan, also called a pension, is an employer-sponsored retirement plan. Benefits are paid monthly upon retirement and are calculated based such factors as salary history and length of employment.

defined contribution plan

A type of retirement plan in which the employer, employee or both make contributions on a regular basis. Individual accounts are set up for participants and benefits are based on the amounts credited to these accounts (through employer and employee contributions) plus any investment earnings on the money in the account.

delinquent

Overdue in payment.

department store charge card

A credit card issued by a retail store, which can only be used for purchases in that store.

deposit

A sum of money placed or kept in a bank account.

direct deposit

The electronic transfer of a payment directly from the account of the payer to the recipient’s account.

disability insurance

A type of insurance that replaces income lost due to illness or injury. Most disability insurance policies pay a fixed sum for a fixed period, while others pay a monthly sum for the entire period the insured is not able to earn an income (as determined by his or her qualifications, experience, and training).

Early Warning

Early Warning is a nationwide specialty consumer reporting agency owned and governed by seven of the largest banks in the United States. Financial Service Organizations and others FSOs contribute transactional data to protect the financial system from fraud and abuse.

Earned Income Tax Credit

A refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient’s income and number of children. Because the tax credit is refundable, if the amount of the credit is more than the taxpayer owes in taxes, they will receive the difference in the form of a refund.

Earnings

Money received as compensation for labor.

Education Tax Credit - American Opportunity Credit

A tax credit that enabled more student and parents to pay for part of their college expenses in the 2009 and 2010 tax years by expanding the existing Hope tax credit.

electronic funds transfer payment

Electronic Funds Transfer is the transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, through computer-based systems and without the direct intervention of bank staff.

emergency fund

An amount of money set aside for use in an emergency, such as the loss of a job, an illness or a major expense.

emergency rental assistance agencies

Non-profit organizations that will provide you with emergency rental funds so you can stay in the rental that you already live in. Most of the time funds are paid directly to the landlord. You may have to provide proof of residence and financial need.

emergency savings fund

An account that is used to set aside funds for an emergency, such as the loss of a job, an illness or a major expense.

employee benefits

A form of compensation paid by employers to employees over and above regular salary or wages. Employee benefits come in many forms and are an important part of the overall compensation package offered to employees.

Equifax

Equifax is a consumer credit reporting agency in the United States, considered one of the three largest American credit agencies along with Experian and TransUnion

eviction

When a renter or tenant is forced to move out by a property owner.

Experian

Experian is a consumer credit reporting agency in the United States, considered one of the three largest American credit agencies, along with Equifax and TransUnion.

Fair Credit Reporting Act

The Fair Credit Reporting Act is is the act that regulates the collection of credit information and access to your credit report. It was passed in 1970 to ensure fairness, accuracy and privacy of the personal information contained in the files of the credit reporting agencies.

faith-based organization

An organization based on a particular religious ideology. It has a religiously-oriented mission statement and its leaders, staff, and volunteers share the same ideology.

Federal Fair Housing Laws

Federal Fair Housing Laws prohibit discrimination in the sale, rental, and financing of property, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status (including children under the age of 18 living with parents of legal custodians, pregnant women, and people securing custody of children under the age of 18), and handicap (disability).

federal government

The United States Federal Government was established by the Constitution and is divided into three branches: the executive, the legislative, and the judicial. There are 15 government departments that administer policies enacted by Congress, collect revenue in the form of taxes, administer programs that improve the welfare of US citizens, and protect and defend US borders.

federal income tax

A tax imposed by the United States federal government and collected by the Internal Revenue Service (IRS). Individuals, corporations, trusts, and all other legal entities must pay income taxes. Federal income taxes are applied on all forms of earnings that make up taxable income, such as employment earnings or capital gains.

federally insured bank

The funds depositors place in banks are insured by the Federal Deposit Insurance Corporation (FDIC), an independent agency of the United States government. FDIC insurance is backed by the full faith and credit of the United States government.

fees

A payment made in exchange for advice or services.

FICO

FICO, or Fair Isaac Corporation, is the largest and best known of several companies that take infomration from credit bureaus and use it to calculate a person’s credit score.

field of membership

Defines the characteristics of the people or entities that a credit union can legally serve.

file a dispute

The process of protesting false or incorrect information or charges with your bank, credit card company, and/or on your credit or banking history report.

finance company

Financial organization that accepts deposits (and pays out interest on them) and lends to consumers and/or businesses.

financial fraud

An intentional act of deception involving financial transactions for purpose of personal gain

forbearance

The action of refraining from exercising a legal right, especially enforcing the payment of a debt.

foreclosure

The process of claiming property when a homeowner is unable to make full principal and interest payments on his/her mortgage. This allows the lender to seize the property (the collateral), evict the homeowner and sell the home, as stipulated in the mortgage contract.

foreclosure proceedings

Legal proceedings initiated by a lender in the case of mortgage default. When a borrower fails to make mortgage payments or otherwise fails to fulfill any of the obligations set forth in the mortgage agreement, the lender can enforce its rights through a foreclosure.

foreclosure rescue scams

Individuals or organizations that claim to be able to help homeowners avoid foreclosure. They generally charge high fees for their services and either provide little to no help to the homeowner, or cheat them out of their home. One common scam is to offer the homeowner a lease-back provision, where they rent the house with the right to buy it back after a certain period. But usually the rent is higher than the mortgage and the repurchase price is so inflated that the homeowner either is evicted for not paying rent or can’t afford the repurchase price and loses the house. In other cases, the consultant tells the homeowner he or she will be able to buy the home back after signing the deed, but then adds on so many fees and costs that it becomes impossible.