Glossary

Available Credit:

In the context of a Line of Credit through CreditFresh, Available Credit is the Credit available for withdrawal on your account. No draws are permitted if you are Delinquent (i.e. late on any payment) or in Default.

ACH:

Short for Automated Clearing House, ACH payments are authorized electronic fund transfers that are automatically debited from your bank account. We encourage you to pay down your Line of Credit using ACH payments.

Billing Cycle:

The time between the dates of regular Periodic Statements.

Cash Advance:

In the context of a Line of Credit though CreditFresh, a draw on a Line of Credit.

Credit:

An arrangement where a Lender provides a borrower with money, and the borrower repays the initial amount borrowed (and in most cases additional interest or fees) at a future date.

Credit Bureau:

An agency that gathers and compiles information from creditors to judge the consumer’s ability to repay debts. A Lender might use the consumer’s credit report from a Credit Bureau to help assess a consumer's credit application.

Credit Check:

An inquiry made to a Credit Bureau to receive information that can be used to help determine a consumer’s creditworthiness.

Credit History:

A record of a borrower’s repayment history for previous debts. A Lender may request a consumer’s Credit History from a Credit Bureau and use it as a tool to gauge the consumer’s likelihood of debt repayment.

Credit Limit:

The maximum amount of Credit that a Lender will provide to a consumer. In the context of a Line of Credit through CreditFresh, a customer’s approved Credit Limit is the upper limit on the amount they can borrow.

Credit Report:

A report that is typically compiled by a Credit Bureau with information such as your previous payment history on debts from banks, credit card companies, collection agencies, governments and other creditors.

Credit Score:

A Credit Score is calculated based on information in your credit report, including payment history, the amount of debt you have and the length of your Credit History. A Lender may use this score to determine a customer’s likelihood of successful debt repayment in the future.

Credit Utilization Ratio:

A Credit Utilization Ratio compares how much you owe on all your open-end credit accounts with the total amount of open-end credit you have available. It is typically expressed as a percentage.

Default:

Failure of a borrower to meet the legal obligations (or conditions) of a Loan or Line of Credit, usually including the failure to make timely payments. The credit agreement will usually contain reasons an account may be considered in Default.

Delinquency:

The status of a borrower’s account when they are behind on repaying their Loan.

Direct Deposit:

Funds that are withdrawn from one account and deposited in another.

Effective Date:

For a Line of Credit Agreement, the Effective Date refers to the date on which the agreement comes into effect – this means that on this date, you can start taking Cash Advances up to your available Credit Limit. The Effective Date of a Cash Advance is the day when the requested funds are supposed to be received by the borrower.

Fair Isaac Corporation (FICO) Score:

Created by the Fair Isaac Corporation, FICO is the first credit score, it represents a person’s ability to repay a Loan.

Lender:

A person or company that extends Credit to a borrower based on terms that both parties agree to as set out in an agreement.

Loan:

A Loan is an arrangement between a Lender and a borrower, where the Lender provides funds to the borrower based on an agreement that the amount will be repaid (and in most cases, with interest and/or fees).

Line of Credit:

An open-end, revolving form of credit. The borrower can borrow any amount from the Lender up to their approved Credit Limit as long as they have Available Credit. The Available Credit can be withdrawn at once or over a period of time. If there is an Outstanding Balance on a Line of Credit, the borrower will be responsible for making Minimum Payments.

Line of Credit Agreement:

A legally-binding document which details the terms and conditions of a Line of Credit.

Minimum Payment:

In the context of a Line of Credit, the minimum amount required to be paid to for each Billing Cycle, as detailed in the Periodic Statement. In the context of a Line of Credit through CreditFresh, the Minimum Payment will include both the applicable Billing Cycle Charge and a payment towards your Outstanding Principal Balance.

Online Lender:

A Lender that operates online and who may or may not have a physical storefront.

Open-End Loan:

A form of Loan with no fixed term or end date. They are sometimes called revolving loans since a borrower can draw from it more than once up to their available Credit Limit. A Line of Credit is an example of an Open-End Loan.

Outstanding Balance:

The unpaid balance on a debt.

Outstanding Principal Balance:

The amount of money a borrower owes, excluding any interest or fees incurred.

Personal Line of Credit:

A Personal Line of Credit is an open-end credit product that allows you to make draws, repay and redraw as needed, from your Available Credit.

Principal Payment:

The amount of a payment that is applied towards reducing the outstanding amount borrowed.

Periodic Statement:

A document that details the activity on a Line of Credit account including withdrawals, payments and charges assessed for a particular Billing Cycle.

Responsible Lending:

A principle of treating consumers fairly by considering their interests. Ensuring transparency and working with borrowers to get their accounts back into good standing if they experience difficulties in repayment are core to Responsible Lending practices.

Revolving Credit:

A form of Credit where once approved, a borrower will have access to funds up to their available Credit Limit.

Statement Date:

The date that a Periodic Statement is generated.

Truth in Lending Act (TILA):

A federal law created to promote the informed use of Credit by consumers. Amongst other things, TILA requires creditors to disclose terms and costs of credit to consumers in a clear, consistent manner to help consumers evaluate the costs associated with Credit products.

Unsecured Loan:

A Loan where a Lender relies solely on the borrower’s ability to repay. This is different from a secured Loan requiring the borrower to provide collateral that the Lender could make a claim against in the event the amount borrowed is not repaid on a timely basis.