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| Credit scoring system | A numerical system designed to measure the likelihood that a borrower will repay a debt created by assigning scores to various characteristics connected to creditworthiness. |
| Credit union | A nonprofit, cooperative financial institution owned and controlled by the people who use its services, usually a group such as employees in the same company or industry. Credit unions historically have been able to offer lower rates and fees and still operate in the black. Credit unions rely on a financial reserve to absorb unexpected losses from loan defaults or other financial setbacks, and the majority of credit unions carry federal deposit insurance that protects individual accounts up to a specified amount in the event the credit union fails. |
| Creditor | One who is owed money. |
| Customer Identification File (CIF) | A computerized central file of information about a bank?s customers that includes account and credit information. |
| Debit card | A payment card that is linked directly to a customer's bank account. Some cards require a personal identification number. Others require a customer's signature. A PIN-based or direct debit card removes a purchase price from a customer's checking account almost immediately. A signature-based or deferred debit card has a Visa or MasterCard logo and removes the purchase price from a customer's bank account in two or three days. |
| Debt | Money one person or firm owes to another person or firm. |
| Debt consolidation | The replacement of multiple loans with a single loan, often with a lower monthly payment and a longer repayment period. It's also called a consolidation loan. |
| Debt-to-income ratio | The percentage of before-tax earnings that are spent to pay off loans for obligations such as auto loans, student loans and credit card balances. Lenders look at two ratios. The front-end ratio is the percentage of monthly before-tax earnings that are spent on house payments (including principal, interest, taxes and insurance). In the back-end ratio, the borrower's other debts are factored in. |
| Debtor | Technically, a person who has filed a petition for relief under the bankruptcy laws. More generally, anyone who owes. |
| Default | The condition that occurs when a consumer fails to fulfill the obligations set out in a loan or lease |
| Discount rate | The interest rate at which financial institutions that are members of the Federal Reserve System (Fed) may borrow on a short-term basis directly to cover temporary deficiencies in the bank?s reserves. Banks borrow from the Fed as a last resort because frequent borrowing would raise concern by bank regulators. |
| Down payment | An initial, partial payment on a purchase. |
| E-commerce | A system used to conduct business transactions of buying and selling goods and services over a computer network. |
| Earned and unearned income | Two different sources of income: earned income comes from wages, salary or business profits; unearned income comes from sources such as interest, dividends, rental income and pension benefits. |
| Effective federal funds rate | The average interest rate that federal funds actually trade at in a day. The federal funds rate will remain stable for months at a time, but the effective rate is a volatile one that will vary every business day. |
| EFT | Electronic funds transfer. The transfer of money between accounts by consumer electronic systems such as automated teller machines (ATMs), and electronic payment of bills. |
| Electronic cash | Also known as e-cash. A system used to transfer cash over the Internet to pay for goods and service. |
| Electronic check presentment | Called ECP for short, it captures an electronic image of the check at the point of sale. The image, rather than the paper check, is then processed by banks and clearinghouses. |
| Electronic commerce | A system used to conduct business transactions of buying and selling goods and services over a computer network. |
| Electronic funds transfer | The transfer of money between accounts by consumer electronic systems such as automated teller machines (ATMs), and electronic payment of bills. |
