Glossary of Mortgage and Credit Terms

A 
Annual FeesA yearly fee charged by credit grantors for the privilege of using a credit card.
Annual Percentage RateThe cost of credit at a yearly rate.
ApplicantA person applying for credit privileges, employment or some other benefit.
AssetAny thing you own that has value or use.
Authorized Account UserThe person authorized by the contractually responsible party to use the account.
B 
BankruptcyThe state of being bankrupt or the fact of becoming bankrupt; "bankrupt" means a person who has made an assignment or against whom a receiving order has been made; a debtor "ceases to meet his/her liabilities generally as they become due". As cited in the Bankruptcy and Insolvency Act of Canada.
Bank of CanadaCanada's central bank. The Bank of Canada implements and oversees monetary policy for Canada.
Bank RateThe interest rate paid by major financial institutions if they borrow from the Bank of Canada. The Bank Rate influences the interest rates major financial institutions charge and pay their customers.
C 
Consumer Price IndexAn index that measures movements in the average price of products and services typically consumed by Canadian families.
D 
DeflationAn actual decline in the general level of prices in the economy.
DemographicsCharacteristics of the population that influence consumption of products and services. They include age, sex, race, family size, level of education, occupation, income and location of residence.
DepressionA prolonged downturn in the economy and level of business activity.
DelinquencyThe inability of an individual to make a credit or loan repayment within a specified (grace) period. At that point an account would become delinquent. Equifax delinquency ratings fall between 0 (Too New to Rate) and 9 (Bad debt; placed for collection). See Payment Timeliness Rating.
E 
Economic GrowthThe rate of change in output from one year to the next.
EquifaxOne of two major credit-reporting agencies in Canada headquartered in Atlanta, Georgia.
F 
Fiscal PolicyThe use of government spending and taxation policies to influence the economy.
Foreign Exchange RateThe value of a nations currency in terms of another nation's currency.
G 
Gross Domestic ProductThe total value of all goods and services produced by the Canadian economy in a single year.
Gross National ProductThe value of all goods and services accruing to Canadians in a given year. It equals Gross Domestic Product, plus income from Canadian production earned by non-residents (such as interest and dividends paid to foreign lenders).
H 
Home Equity LoanA loan based on the difference of the amount of equity paid on a home, and the home's current market value.
I 
InflationA rise in the average level of prices in the economy.
Insolvent PersonA person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under the Bankruptcy and Insolvency Act amount to one thousand dollars, and
a) Who is for any reason unable at meet his obligations as they generally become due;
b) Who has ceased paying his current obligations in the ordinary course of business as they generally become due; or
c) The aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due.
InstalmentAn account in which the outstanding balance is reduced by a fixed or predetermined payment over the term of the account. Includes loans with Banks, Credit Unions or Trust companies.
J 
JudgementThe official court decision of an action or suit. This public record may be listed on a credit report in matters of money and debts owed.
L 
LeaseA written document containing the conditions under which the possession and use of real and/or personal property are given by the owner to another for a stated period and for a stated consideration.
LienA legal hold or claim of one person on the property of another as security for a debt or charge. The right given by law to satisfy debt. (A lien must be paid and released).
M 
Monetary PolicyThe ability of the Bank of Canada to influence the economy through changes in short-term interest rates and the money supply.
P 
Permissible PurposesCanadians are protected by permissible purpose as defined in the relevant provincial Credit Reporting Acts (CRA's), as well as the Privacy Act of 2001 and Personal Information Protection and Electronics Document Act of 2001. Requests not meeting specified criteria, as set out in legislation will be denied access to credit reports.
Personal Disposable IncomePersonal income minus personal income tax payments.
Payment Timeliness RatingA measure of the manner of payment made by an individual on an account. Rating scale:
R0 - Too new to rate; approved but not used
R1 - Pays (or paid) within 30 days of payment due date or not over one payment past due
R2 - Pays (or paid) in more than 30 days from payment due date, but not more than 60 days, or not more than two payments past due
R3 - Pays (or paid) in more than 60 days from payment due date, but not more than 90 days, or not more than three payments past due
R4 - Pays (or paid) in more than 90 days from payment due date, but not more than 120 days, or four payments past due
R5 - Account is at least 120 days overdue, but is not yet rated "9"
R7 - Making regular payments through a special arrangement to settle your debts
R8 - Repossession (voluntary or involuntary return of merchandise)
R9 - Bad debt; placed for collection; moved without giving a new address
R 
RecessionWhen the Gross Domestic Product declines for at least two consecutive three-month periods
Retail Department StoreIncludes accounts from the major retail department stores in Canada (i.e., Zellers, Sears, The Hudsons Bay Co., Canadian Tire, etc.).
RetailIncludes multiple types of retail stores (i.e., department stores, clothing & variety stores and home furnishing stores).
RevolvingAn account in which the outstanding credit balance is being reduced by at least a specified minimum payment each month. Includes revolving accounts with Banks, Credit Unions, Trust companies, personal lines of credit or credit cards.
S 
Smart CardAn electronic prepaid cash card with an imbedded computer chip, which stores more information and performs more functions than a credit card or debit card.
Sales FinanceAccounts from private label and third party sales finance companies (i.e., The Brick, Future Shop, etc.).
SegmentationThe systematic grouping of consumers built to help design and target their needs.
StagflationA period of time in which both the unemployment rate and the rate of inflation are relatively high.
T 
Trans UnionOne of two major Credit Reporting Agencies in Canada. One of three major Credit Reporting Agencies in the United States.
Trade LineA credit vehicle or debit instrument issued to an individual by a credit grantor. Types of trade lines include Bank Loans, Credit Cards, Retail Cards, Personal Lines of Credit and Car Loans/Leases. (Also referred to as a "trade").
U 
UnemploymentThe percentage of the labour force that is not employed but currently seeking work.