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GLOSSARY
Credit squeeze
A credit squeeze is an economic condition where the availability of loans is dramatically reduced. During a credit squeeze, both individuals and corporations have difficulty obtaining affordable loans.
Credit union
A credit union is a non-profit organization that provides deposit and lending services. Credit union members share ownership in the organization, and therefore, share in its profitability. Individuals usually qualify for credit union membership by their association with a certain group, such as a labor union or university alumni association. Credit unions, like banks, carry deposit insurance.
Creditor
The person or company/lender who is owed money.
Creditor meeting
A creditor meeting is a gathering that takes place several weeks after a bankruptcy case is filed. The bankrupt debtor and the bankruptcy trustee must attend the meeting, but creditors involved in the case have the option to participate. The creditor meeting is also called a 341 meeting, after the section of the Bankruptcy Code that describes it.
Credits
Credits, in accounting, are the amounts that offset debits. Pertaining to an individual's credit card statement, a credit is an amount that reduces the total amount due. In taxes, credits are amounts that reduce one's total tax liability.
Creditworthiness
Creditworthiness is an individual's or business's ability and willingness to repay debt. When an individual or business submits a loan application, the lender reviews the applicant's qualifications, including credit history and income, and makes an evaluation regarding that applicant's creditworthiness. This evaluation determines if, and on what terms, the loan application will be accepted.
Cross-collateralization
Cross-collateralization occurs when one piece of real or personal property is used as security for two separate loans.
Crossed check
A crossed check is a written draft that can't be cashed; it can only be deposited. Crossed checks can be identified by parallel lines that run across the entire face of the check or in the top left corner. Crossed checks are not widely used in the U.S.
Crowding out
Crowding out is an economic situation where interest rates are rising due to excessive government borrowing. As the government borrows more and more, market interest rates rise, eventually to the point that individuals and businesses can no longer afford to borrow.
Cul-de-sac
A cul-de-sac is a street which ends in a broad circle with houses arranged around it. The street is typically a dead end street.
Cumulative interest
Cumulative interest is the combined total of interest expenses associated with a loan over time.
Curable defect
A minor or inexpensive problem with a property that can be remedied. Peeling or chipping paint is a curable defect, but location in a high crime area is not.
Curb appeal
How a home looks from the street.
Cure period
A cure period is a contractually designated timeframe during which a borrower, or party to a contract, can fix a default. If a commercial borrower violates a financial covenant, that borrower can avoid default by getting the business back into compliance before the cure period ends.
Current assets
Current assets are line items on a balance sheet that represent cash and property that will be converted to cash in 12 months or less. Typical current asset accounts are inventory, accounts receivable, prepaid expenses, and short-term investments.