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
What Is a Credit Application? A credit application is a request for an extension of credit. Credit applications can be done either orally or in written form, usually through an electronic system. Whether done in person or individually, the application must legally contain all pertinent information relating to the cost of the credit for the
What Is a Credit Business Associate (CBA)? The Credit Business Associate (CBA) designation is sponsored by the National Association of Credit Management (NACM) and targeted toward individuals who want a career in credit management. The designation shows that the holder has mastery in financial statement analysis, basic financial accounting, and business credit principles. Key Takeaways
What is Credit Card Arbitrage Credit card arbitrage refers to the process of borrowing money from a credit card at a low interest rate and then investing that money at a higher interest rate to try to make a profit. The lowest risk and most common type of credit card arbitrage entails taking advantage of
What Is Credit Card Authentication? Credit card authentication is the process of confirming the validity of a customer’s credit card by checking with the company that issued the card. Authentication is roughly the first half of the transaction process when using a credit card. Once the card is authenticated, the purchase is approved or denied
What Is a Credit Card Authorized User? A credit card authorized user is a person who has permission to use another person’s credit card but isn’t legally responsible for paying the bill. For personal cards, authorized users are usually family members, such as a child or a spouse. Depending on the credit card issuer, some
What Is a Credit Card Block? A credit card block is the reservation of a portion of a credit or debit card balance for the cost of services not yet rendered. Credit card blocking is most common in the hospitality industry. However, it is also used by rental car companies. In general, credit card blocking
What Is a Credit Card Dump? A credit card dump is a type of crime in which the criminal makes an unauthorized digital copy of a credit card. This type of crime has existed for decades, but it has seen wider public awareness in recent years due to the rising prevalence of credit card forgeries
