Glossary

Adverse Credit - an entry on a credit file that decreases the overall credit score. Examples include a missed loan payment, a declined application for credit, or a County Court Judgment (CCJ).

Arrears - a situation in which a borrower fails to make loan payments leading to an increase in the debt they owe.

Bad Credit - see Adverse Credit.

Bankrupt - a situation in which an individual or other entity has been subjected to a Bankruptcy Order.

Bankruptcy - A situation in which a debtor's assets are worth less than their liabilities and their assets have been transferred to an administrator. Bankruptcy can affect a debtor's credit rating and ability to borrow for more than five years.

CCJ - see County Court Judgment

County Court Judgment - A ruling issued by a County Court ordering one party to pay an amount to settle a debt to another party. A record of the ruling may be made on the debtors credit file and may affect their ability to obtain credit.

Credit Check - a procedure by which a person’s credit score is checked by a lender to ascertain their worthiness to borrow money.

Credit History - a file containing an individuals’ past and present borrowing and records of repayments made and missed.

Credit Rating - a score given to an individual based on their credit history that lenders will use to help decide whether to lend them money.

Credit Reference Agency - an agency that collects information on people’s credit histories which are used to derive their credit scores. Lenders utilise credit reference agencies when performing credit checks on individuals.

Default - a situation in which a borrower misses a payment on their loan.

Light Adverse - a credit file with a small number of bad credit entries.

Medium Adverse - a credit file with a medium level of bad credit entries.

Heavy Adverse - a credit file with a large number of bad credit entries.

Repossession - the legal process by which a creditor takes possession of a debtors properly in lieu of the debt being repaid.