Wi$eUp Glossary

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Caveat Emptor

Let the buyer beware.

Certificate of Deposit (CD)

A certificate from a bank stating that the named party has a specified sum on deposit, usually for a given period of time at a fixed rate of interest. Early withdrawal penalties apply to CDs.

Checking Account

An account which allows the holder to write checks against deposited funds. Some checking accounts pay interest.

Co-signer

An individual with an established credit record who agrees to make the payments on a loan if the borrower does not.

Compensation

Full package offered by employer to employee that includes salary or wages and employer-provided benefits.

Compound Interest

Interest computed on the sum of the original principal and accrued interest.

Coverdell Education Savings Account

This account named after Senator Paul Coverdell (GA) replaces the Education IRA. It allows parents to make a contribution into the account with an annual limit. The contributions are taxed but the earnings used to pay education expenses are not. There are Internal Revenue rules and guidelines that apply to this account.

Credit Bureau

Most Credit Reporting Agencies are credit bureaus that gather and sell credit-related information about individuals to creditors, employers, landlords, and other businesses. Information includes whether the individual pays bills on time or has filed bankruptcy.

Credit Counseling Service

An organization that administers debt repayment plans for individuals seeking assistance with their credit. Credit counseling services may charge a fee that can range from nominal to high. Credit counseling services may be either not-for-profit or for-profit organizations.

Credit History

An individual's record of paying loans, credit cards and other bills.

Credit Report

A record of an individual's credit history that is compiled by credit-reporting agencies. The history contains a listing of debts, bills submitted to collection agencies, bills paid late, public information such as tax liens and bankruptcies, and a listing of who has requested a copy of the credit report. Negative information can remain in a credit report for seven years, except for bankruptcy, which will remain for ten years.

Credit Reporting Agency (CRA)

Organization that collects information for credit reports and in turn sells the reports to people with a legitimate business need as defined by the Fair Credit Reporting Act. Examples of legitimate business needs are applications for employment, insurance, or to rent an apartment. Companies that loan money and issue credit regularly report payment behaviors to credit reporting agencies.

Credit Score

Computer-generated number indicating the likelihood an individual will repay credit received. The most common credit scores are developed by the Fair, Isaac Company and are referred to as FICO scores. Scores range from 300 to 850. Higher scores indicate a higher likelihood of repaying debt.