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Glossary - Consumer Debt
Charge Off - means that a creditor has decided to treat an account receivable (or debt) as a loss because payment is unlikely. Basically the creditor will charge off a debt when it has given up in collecting a debt. A creditor usually sells a charged off debt to a third-party collection agency to recoup some of its loss. This results in both the original creditor and the collection agency reporting negative items on a person's credit report.
Default - the failure to pay a debt when due, or honor a contractual obligation.
Default Judgment - a judgment entered against a defendant who has failed to plead or otherwise defend himself against a creditor's lawsuit.
FCRA - Fair Credit Reporting Act. These laws govern credit reporting.
FDCPA - Fair Debt Collection Practices Act. These laws govern collection agencies in the collection of debt.
FICO Score - a credit scoring model developed by the Fair Isaac Corporation. This is used by banks and lenders to asses a person's overall credit worthiness.
Garnishment - a proceeding where a court orders a third party (e.g. bank or employer) to withhold a debtor's property in order to satisfy a debt. Garnishment can occur either before or after a creditor obtains a judgment.
Inquiry - An inquiry is an entry on your credit report showing that a business has requested your credit report for a "permissible purpose" e.g. for a loan, credit card, insurance, etc. "Hard" inquiries may lower your score, while "soft" inquiries have no effect on your score.
Judgment Lien - A judicial lien, or judgment lien, arises out of a proceeding in court. A judicial lien establishes a creditor's right in a debtor's property and allows the creditor to proceed (take) a person's property to satisfy a debt.
Repossession AKA "Repo" - repossession is the act of retaking property, i.e. the seller's retaking goods when sold on credit. A repossession is usually associated with a bank's retaking an automobile when the buyer defaults on the auto loan.