Glossary of Credit Related Terms

Obsolescence

Obsolescence refers to how long negative information should stay in a credit file before it’s no longer considered relevant to the credit granting decision. The FCRA has determined the obsolescence period to be 10 years in the case of bankruptcy and 7 years in all other instances.

Open Account

An account that is active or still being paid.

Open-End Credit

A line of credit that may be used repeatedly up to a certain limit, also called a charge account or revolving credit.

Open-End Lease

A lease that may involve a balloon payment based on the value of the property when it is returned. (Also called finance lease.)

Other Charges

Other charges may be listed on your bill and can include the annual membership fee or late payment fees.

Over-The-Limit Fee

When you charge more than your credit limit allows, you may be charged an over-the-limit, or over-credit-limit, fee. Your card issuer may allow you to exceed your credit limit without telling you in advance, and you may not know you have done so until you receive your bill.

Overdraft Agreement

Some issuers allow you to link your credit card to a checking or savings account that you hold with that bank. When you sign an overdraft agreement and you bounce a check, the bank can charge that amount to your credit card account and the check will clear. This way, you avoid a returned-check fee.

Overdraft Checking Account

A checking account associated with a line of credit that allows a person to write checks for more than the actual balance in the account, with a finance charge on the overdraft.