Does it all just seem so confusing? Becoming familiar with some common terms will go a long way as you maneuver your way out of debt:
Assets
Investments that have monetary value such as cash, real estate, automobiles, boats, collectible art and antiques.
Bankruptcy
A legal proceeding that enables a debtor to become absolved of all debts and get a "fresh start."
Credit bureau
A company that gathers and sells information about how individuals handle their credit.
Credit history
A continuous record of a person's debts and payments.
Credit report
A report that tracks an individual's borrowing and money-management habits. Lenders will approve or deny a loan and set its terms depending on the information found in the person's credit report.
Credit risk
A term used to describe an individual's creditworthiness. Those who are considered to be a better risk by lenders are charged lower interest rates on their loans.
Credit score
A calculated score between 300 and 800 that reflects a person's credit history as shown on their credit report. A credit score is used by lenders to determine loan rates and terms.
Debt consolidation
A strategy for reducing monthly loan payments by replacing multiple loans with one single loan with a longer repayment period.
Delinquent
A negative term indicating that a person is overdue on a timely minimum payment for a loan or credit card. A credit report may show a payment as being 30, 60, 90 or 120 days delinquent.
Garnishment
An amount of money withheld from a debtor's paycheck in order to pay a loan to a third party.
Late payment
A past-due payment.
Non-profit debt consolidation
A consolidation loan company that is often paid, by their clients' creditors, a portion of the debt collected by them.
Secured debt
Debt that is secured by some form of collateral, most often a debtor's home.
Unsecured debt
Debt that is not secured by collateral. Unsecured debts, such as most credit cards, often have a high interest rate compared to mortgages which will use property as co
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