The A–Z glossary
Every term you'll meet when shopping on catalogue credit, explained once, properly.
Affordability check
A look at your income and outgoings to see if the payments fit your budget. Used instead of, or alongside, a credit score.
APR
Annual Percentage Rate — the yearly cost of borrowing, including interest and fees, shown so you can compare.
Credit file
Your record with the credit reference agencies: accounts, payments, CCJs and searches.
Credit limit
The most you can owe on an account at one time. Often starts modest and grows with on-time payments.
Credit score
A number the agencies calculate from your file. Each lender sets its own cut-off.
Default
Recorded when an account falls far behind. Stays on your file for six years.
Hard search
A full credit check other lenders can see. Several in a short time can lower your score.
Interest-free period
A window where no interest is charged if the balance is cleared in time.
Minimum payment
The smallest amount you must pay each month on a revolving account. Paying only this keeps the debt alive for years.
Notice of correction
A short statement you can add to your credit file to explain a missed payment or CCJ.
Revolving credit
An ongoing balance you can spend, repay and spend again, like a store card.
Soft search
A check only you can see. It doesn't affect your score and other lenders can't see it.