Glossary of Terms
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Pin
Personal Identification Number used for security purposes on bank cards (also known as debit cards or check cards) and credit cards. The rightful owner is required to select and memorize a four- or five-digit numeric code, which is required to use the card at ATMs or other points of sale.
Partial Payment
Paying less than the full amount due.
Periodic Rate
The interest rate described in relation to a specific amount of time. For example, the monthly periodic rate is the cost of credit per month; the daily periodic rate is the cost of credit per day.
Permissible Purposes
As defined in section 604 of the Fair Credit Reporting Act, only the named reasons for requesting a credit report are deemed "permissible". Requests not meeting these criteria must be denied.
Personal Line Credit
The maximum amount you can owe at any time, based on your income, debt and your credit history.
Personal Loan
A loan based on your income, debt and credit history.
Piti
Principal, Interest, Taxes and Insurance combined to make up a mortgage payment.
Pmi
Refer to mortgage insurance.
Points
Finance charges paid by the borrower at the beginning of a loan in addition to monthly interest; each point equals one percent of the loan amount.
Posting Date
The date that a transaction is recorded on your account. Some companies assess interest on charges and cash advances from the transaction date, others from the posting date. It is more favorable to assess interest from the posting date, because that may be later, giving you some interest-free days.
Predatory Lending
Abusive lending practices that include making a mortgage loan to an individual who does not have the income to repay it or repeatedly refinancing a loan, charging high points and fees each time and "packing" credit insurance onto a loan.
Predictive Variables
The items that are part of the formula or factors comprising elements of a credit-scoring model. These variables are used to predict a borrower's future credit performance.
Prepayment Penalty
Charges imposed by some lenders as a penalty for paying off a loan earlier than its original payoff date. Prepayment penalties are common among some of the sub-prime and/or predatory lending loan products
Prepayment Penalty Mortgage
A type of mortgage that requires that the borrower pay a prepayment penalty or a fee for repaying the entire loan (or a substantial portion of it) within a certain time period. A "substantial payment" is generally defined as any amount that exceeds 20% of the original principal balance.
Previous Balance
The amount you still owe after last month's payments and charges were added to your balance.
Prime Rate
The interest rate banks charge for loans to their biggest and highest-rated customers. The prime rate changes based on the demand for money and the rate the U.S. Federal Reserve Bank charges to its member banks. It is used as a major economic indicator.
Principal
The outstanding balance of a loan, exclusive of interest and other charges.
Promotional
An interest rate that applies for a limited amount of time. After the time limit expires, the ongoing rate (which is usually higher) is applied to your outstanding balance. Check both rates when deciding which card offers the most value.
Public Record
Information obtained by the Credit Reporting Agency from court records, such as liens, bankruptcy filings and judgments. Public records are open to any person who requests to see them.
