Glossary of Credit Related Terms

Partial Payment

Paying less than the full amount due.

Past Due

When you do not make at least the minimum payment on time, your account is considered past due.

Periodic Rate

The interest rate described in relation to a specific amount of time. For example, the monthly periodic rate is the cost of credit per month; the daily periodic rate is the cost of credit per day.

Permissible Purposes

As defined in section 604 of the Fair Credit Reporting Act, only the named reasons for requesting a credit report are deemed "permissible". Requests not meeting these criteria must be denied.

Personal Line Of Credit

The maximum amount one can owe at any time, based on income, debt and credit history.

Personal Loan

A loan based on a consumer's income, debt and credit history.

Points

Finance charges paid by the borrower at the beginning of a loan in addition to monthly interest; each point equals one percent of the loan amount.

Posting Date

The date that a transaction is recorded on your account. Some companies assess interest on charges and cash advances from the transaction date (see transaction date), others from the posting date. It is more favorable to assess interest from the posting date, because that may be later, giving you some interest-free days.

Preapproval

When a mortgage lender reviews your credit and commits to a specific loan amount.

Prequalification

When a mortgage lender reviews your credit history, income, assets and liabilities in order to determine an appropriate loan amount.

Previous Balance

The amount you still owe after last month's payments and charges were added to your balance.

Prime Rate

The interest rate banks charge for loans to their biggest and highest-rated customers. The prime rate changes based on the demand for money and the rate the u.s. federal reserve bank charges to its member banks. It is used as a major economic indicator.

Principal

The outstanding balance of a loan, exclusive of interest and other charges.

Promotional Aka Introductory Rate

An interest rate that applies for a limited amount of time. After the time limit expires, the ongoing rate (which is usually higher) is applied to your outstanding balance. Check both rates when deciding which card offers the most value.

Public Record

Information obtained by the Credit Reporting Agency from court records, such as liens, bankruptcy filings and judgments. Public records are open to any person who requests them.