What Is the Credit Repair Organizations Act (CROA)? The Credit Repair Organizations Act (CROA) is a piece of consumer protection legislation that regulates the behavior of companies offering credit repair services. These companies charge customers a fee to help them improve their credit scores. Typically, this is done by disputing false and negative information contained
What Is a Credit Report? A credit report is a detailed breakdown of your credit history prepared by a credit bureau. Credit bureaus collect financial information about you and create credit reports based on that information, and lenders use the reports along with other details to determine your creditworthiness. In the United States there are
What Is a Credit Reporting Agency? A credit reporting agency is a business that maintains historical credit information on individuals and businesses. They receive reports from lenders and various other sources, compiled in a credit report that includes a credit score when issued. They may also be referred to as a credit reporting bureau. Key
What Is a Credit Loss Ratio? A credit loss ratio measures the ratio of credit-related losses to the par value of a mortgage-backed security (MBS). Credit loss ratios can be used by the issuer to measure how much risk they assume. Different mortgage-backed securities and different sections within a mortgage-backed security—also referred to as tranches—have
What Is the Credit Market? Credit market refers to the market through which companies and governments issue debt to investors, such as investment-grade bonds, junk bonds, and short-term commercial paper. Sometimes called the debt market, the credit market also includes debt offerings, such as notes and securitized obligations, including collateralized debt obligations (CDOs), mortgage-backed securities
What Is a Credit Score? A credit score is a number from 300 to 850 that rates a consumer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders. A credit score is based on credit history: number of open accounts, total levels of debt, repayment history, and other factors. Lenders use
What Is Credit Scoring? Credit scoring is a statistical analysis performed by lenders and financial institutions to determine the creditworthiness of a person or a small, owner-operated business. Credit scoring is used by lenders to help decide whether to extend or deny credit. A credit score can impact many financial transactions, including mortgages, auto loans
What Is a Credit Agency? A credit agency is a for-profit company that collects information about individuals’ and businesses’ debts and assigns a numerical value called a credit score that indicates the borrower’s creditworthiness. Understanding Credit Agencies Creditors and lenders, such as credit card companies and banks, report their customers’ borrowing activity and history to credit
What Is a Credit Agreement? A credit agreement is a legally-binding contract documenting the terms of a loan agreement; it is made between a person or party borrowing money and a lender. The credit agreement outlines all of the terms associated with the loan. Credits agreements are created for both retail and institutional loans. Credit
What Is Credit Analysis? Credit analysis is a type of financial analysis that an investor or bond portfolio manager performs on companies, governments, municipalities, or any other debt-issuing entities to measure the issuer’s ability to meet its debt obligations. Credit analysis seeks to identify the appropriate level of default risk associated with investing in that
