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FINANCIAL GLOSSARY demystifies financial terms for Canadian consumers looking to understand their fiscal rights and obligations with credit in Canada
Canadian consumers trying to get a better handle on their financial rights and responsibilities in Canada often walk into a blizzard of new words that they dont fully understand. This Financial Glossary may help you get a deeper understanding of your credit situation as a consumer when looking for a credit card, loan, mortgage, or credit report.
Here is a glossary of most commonly used financial terms
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A yearly interest fee charged by credit grantors for the privilege of using a credit card or to give you credit or a loan. Annual Percentage Rate The cost of credit at a yearly
A person applying for credit privileges, employment, property rental or some other benefit.
Any thing you own that has value or use.
Authorized Account User
The person authorized by the contractually responsible party to use the account.
A proceeding in Canada that may legally release a person from repaying debts owed. The law contains several chapters which relate to different methods of relief: Straight Bankruptcy (total liquidation of assets) Personal Bankruptcy, Business Reorganizations, Farm Debt Bankruptcy, and Wage Earner Repayment Plan.
A court order terminating bankruptcy proceedings on old debts.
A court order that denied a bankruptcy petition making the debtor still liable for all
A financial plan for saving and spending money.
Charge or Credit Card
A card which requires payment in full upon receipt of the billing statement.
An account which has been transferred from a routine debt, to a Collection Department of the creditor's firm or to a separate professional debt collecting firm (Collection
A loan usually obtained for the purpose of reducing the amount of payments of bills owed by consolidating the bills into one loan payment. The consumer pays off several bills with the proceeds from one loan and is left with one consolidated monthly payment.
Consumer Reporting Act/Fair Credit Reporting Act
These are Provincial Acts which enable consumers to learn what information Credit Reporting Agencies have on file about them, and to dispute inaccurate data in the file. It also establishes specific permissible purposes for which credit reports may be requested, and places time limits on how long adverse information may be reported. It also establishes Consumers Credit Rights and outlines and controls the actions of the Credit Bureaus. Fair Credit Reporting Act A law which enables consumers to learn what information Credit Reporting Agencies have on file about them and enables them or their Credit Repair Company to dispute inaccurate data in the file. It also establishes specific permissible purposes for which credit reports may be requested, and places time limits on how long adverse information may be
Property acceptable as security for a loan or other obligation.
Person who uses and/or buys goods and services for family or personal use.
Consumer Credit Counseling
Service Organizations that are established to assist consumers find a way to repay debts through careful budgeting and management of funds. They are generally funded by the LENDERS and as such their loyalty is to them in any settlement proposal. These are usually nonprofit organizations, funded by creditors. By requesting that creditors accept a longer pay-off period, the counseling services can often design a successful repayment plan, however the Creditor ends up paying off the entire debt in full for a very long time and as such can negatively affect their Credit Report.
Person responsible for repaying a debt if the borrower defaults.
A trust or a promise to pay later for goods or services purchased today.
A rectangular piece of plastic used instead of cash or checks authorizing payment for goods and
Person or business furnishing consumer goods and/or services on credit.
Record of how a consumer has paid credit accounts in the past, used as a guide to determine whether the consumer is likely to pay accounts on time in the
A maximum pre established limit either in monetary , goods or services that a Creditor is authorized to spend on a non cash basis.
Credit Repair Companies
Individuals or Companies that have the skills and knowledge and time to dispute negative information on an individuals Credit Report. They legally clean-up or erase a consumer's bad credit information and give them a new credit start. Also know as Credit
A record or file given to a prospective lender, landlord or employer defining the credit standing of a prospective person. It is used to help determine credit
Credit Reporting Agency (Credit Bureau)
A company which gathers, files and sells information to creditors, landlords and/or employers to facilitate their decisions to extend credit or to
Purchases are deducted directly from the consumer's personal chequing account.
The largest of the two major credit reporting agencies, headquartered in Montreal Quebec. Trans Union is the smaller of the agencies and is headquartered in Hamilton Ontario.
Legal process whereby a creditor has obtained judgment on a debt may obtain full or partial payment by seizure of a portion of a debtor's assets (wages, bank account, etc.)
The period allowed to avoid any finance charges by paying off the balance in full before the due
Home Equity Loan
A loan based on the difference of the amount of equity paid on a home, and the home's current market value. Sometimes referred to as a Line of Credit.
A credit account in which the amount of the payment and the number of payments are predetermined or fixed
The cost of borrowing or lending money, usually a percentage of the amount borrowed or
Online Canadian company that provide credit reports and credit monitoring to consumers who want to know their personal credit history and prevent identity
The official court decision of an action or suit. This public record may be listed on a credit report in matters of money and debts
A written document containing the conditions under which the possession and use of real and/or personal property are given by the owner to another for a stated period and for a stated
A legal hold or claim of one person on the property of another as security for a debt or charge. The right given by law to satisfy debt. (A lien must be paid and
A lien or claim against real property given by the buyer to the lender as security for money borrowed. 1st Mortgage-Also known as the "primary" mortgage-has priority over the claims of subsequent lenders for the same property. 2nd Mortgage-Also know as the "secondary" mortgage-is a loan secured by mortgage or trust deed, which lien is "junior" to another mortgage or
As defined in each Provincial Act is the outlining of the only the named reasons for requesting a credit report which are deemed "permissible". Requests not meeting these criteria must be
Personal Line of Credit
The maximum amount one can owe at any time, based on income, debt and credit
A loan based on a consumer's income, debt and credit history.
The outstanding balance of a loan, exclusive of interest and other charges.
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
Forced, or voluntary surrender of merchandise as a result of the customer's failure to pay as promised. There are several types and descriptions of repossession
An account, which requires at least a specified minimum payment, each month plus a service charge on the balance. As the balance declines, the amount of the service charge, or interest, also
Secured Credit Card
A credit card secured by a savings account that has been established in advance by the borrower. The amount in the account usually determines the limit on the credit card. These accounts present no real risk factor for creditors and are therefore much easier to obtain.
An electronic prepaid cash card, usually sold at banks and exchanged at face value. T Trans Union One of the major Credit Reporting Agencies in Canada that keep records of your credit report.
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