CreditTech - Innovations in Credit and Lending Technologies
(Flashcards)
Credit Scoring
A method used by lenders to assess an individual’s creditworthiness based on their credit history.
Alternative Data
Non-traditional data sources used to assess credit risk, such as utility payments or rental history.
Peer-to-Peer Lending
A method of lending that allows individuals to lend and borrow directly from each other, bypassing traditional financial institutions.
Microcredit
Small loans given to individuals in developing countries who typically lack access to conventional banking services.
Credit Union
A cooperative financial institution owned and controlled by its members, offering similar services to banks.
FinTech
Technology-driven innovation in the financial services sector.
Credit Score Model
Analytical tools used by lenders to determine a borrower’s creditworthiness.
Underwriting
The process of evaluating the risk of insuring a home, automobile, life, etc., and the terms of the coverage.
Debt Financing
Raising capital through the sale of bonds or borrowing, rather than issuing equity.
Revolving Credit
A type of credit that allows the borrower to withdraw, repay, and re-borrow funds up to a pre-approved limit.
Fixed-Rate Loan
A loan with an interest rate that remains the same throughout the term of the loan.
Variable-Rate Loan
A loan with an interest rate that may change periodically based on an index.
Credit Line
A pre-approved amount of credit extended to a borrower by a financial institution.
Credit Card
A payment card issued to users as a method of payment, allowing them to borrow funds within a credit limit.
Digital Credit
Credit services provided through digital platforms, often leveraging online data.
Lending Platform
An online platform that connects borrowers with lenders, often through peer-to-peer lending networks.
Credit Risk Assessment
The process of evaluating the risk of a borrower defaulting on a loan.
Loan Origination
The process of processing a new loan application.
Credit Reporting Agency
An agency that collects and compiles consumer credit information and sells it to creditors.
Debt Collection
The process of recovering payments from borrowers who have defaulted on their loans.
Loan Servicing
Managing the repayment process of loans, including collecting payments and managing accounts.
Subprime Lending
Lending to borrowers with poor credit histories, typically associated with higher interest rates.
Interest Rate Risk
The risk that changes in interest rates will affect the value of financial assets or liabilities.
Credit Monitoring
Services that help consumers track their credit status and protect against identity theft.
Credit Insurance
Insurance products that cover loan repayments in the event of the borrower’s inability to pay.
Peer Review Lending
A lending model where the community or group reviews and approves loans for its members.
Credit Analytics
Tools and techniques for analyzing credit data to predict future creditworthiness.
Loan Default
Failure to repay a loan according to the agreed terms.
Credit Enhancement
Techniques used to improve the creditworthiness of borrowers to make them more attractive to lenders.
Credit Counseling
Services provided to help individuals manage their finances and debts.
Debt-to-Income Ratio
A financial measure comparing an individual’s monthly debt payments to their monthly gross income.
Credit Bureaus
Companies that collect and maintain credit information on consumers.
Payment History
A record of an individual’s past credit account payments, a key factor in credit scoring.
Credit Utilization Ratio
The percentage of a credit limit that a borrower is using, an important factor in credit scoring.
Hard Inquiry
A credit check that occurs when a lender checks a consumer’s credit report as part of the lending process.
Soft Inquiry
A non-transactional review of a credit report, often initiated by the consumer or for promotional purposes.
Credit Facilities
Financial products or services provided by banks or other financial institutions.
Loan Terms
The conditions, including interest rate, term length, and repayment schedule, under which a loan is granted.
Collateral
Assets pledged by a borrower to secure a loan, which may be forfeited if the loan is not repaid.
Unsecured Loan
A loan that is not backed by collateral, relying solely on the borrower’s creditworthiness.
Secured Loan
A loan that is backed by collateral, reducing the lender’s risk.
Credit Bureau Score
A numerical representation of a person’s creditworthiness based on their credit report.
Bankruptcy
A legal process for individuals or businesses unable to repay their outstanding debts.
Foreclosure
A legal process where a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as collateral for the loan.
Loan Agreement
A formal contract between a borrower and a lender outlining the terms of the loan.
Credit Terms
Conditions under which credit is extended, including the repayment period and interest rate.
Financial Statement
A formal record of the financial activities and position of a business or individual.
Credit Limit
The maximum amount of credit that a financial institution extends to a borrower.
Week 08: CreditTech - Innovations in Credit and Lending Technologies