![]() |
|
Financial Terms | |
credit policy |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: finance, accounting, tax advisor, inventory, money, payroll, credit, financial, Also see related: home financing, insurance, credit, real estate, home insurance, property, home buyer, home, buy home, |
Definition of credit policycredit policyStandards set to determine the amount and nature of credit to extend to customers.
Related Terms:Insurance Policy (Credit Insurance)A policy under which the insurance company promises to pay a benefit of the person who is insured. Accidental Dismemberment: (Credit Insurance)Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident. Accomodating PolicyA monetary policy of matching wage and price increases with money supply increases so that the real money supply does not fall and push the economy into recession. Amortization (Credit Insurance)Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity. Beggar-My-Neighbor PolicyA policy designed to increase an economy's prosperity at the expense of another country's prosperity. Beneficiary (Credit Insurance)The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor. Best-interests-of-creditors testThe requirement that a claim holder voting against a plan of reorganization ![]() Borrower (Credit Insurance)A consumer who borrows money from a lender. Cold-Turkey PolicyDecreasing inflation by immediately decreasing the money growth rate to a new, low rate. Contrast with gradualism. Collection policyProcedures followed by a firm in attempting to collect accounts receivables. collection policyProcedures to collect and monitor receivables. Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Comparative credit analysisA method of analysis in which a firm is compared to others that have a desired Consumer creditcredit granted by a firm to consumers for the purchase of goods or services. Also called Consumer Credit Protection ActA federal Act specifying the proportion of CreditMoney loaned. ![]() CreditBuying or selling goods or services now with the intention of payment following at some time in CreditOne side of a journal entry, usually depicted as the right side. CreditA rating of a company's credit (ability to payback debt), usually by a third party credit agency. creditOn your bank statement, 'credit' represents funds that you have deposited into your account. The opposite of a credit is a debit. Credit analysisThe process of analyzing information on companies and bond issues in order to estimate the credit analysisProcedure to determine the likelihood a customer will pay its bills. credit bureauAn organization that provides financial institutions with credit information concerning existing or potential customers who are looking to obtain credit services. credit cardA revolving source of credit with a pre-established limit. You have to pay interest on a credit card if you have an outstanding balance. Credit CrunchA decline in the ability or willingness of banks to lend. Credit enhancementPurchase of the financial guarantee of a large insurance company to raise funds. Credit LossA loan receivable that has proven uncollectible and is written off. credit memoA record of the funds which have been credited to your account. Credit periodThe length of time for which the customer is granted credit. Credit RationingRestriction of loans by lenders so that not all borrowers willing to pay the current interest rate are able to obtain loans. Credit riskThe risk that an issuer of debt securities or a borrower may default on his obligations, or that the Credit RiskFinancial and moral risk that an obligation will not be paid and a loss will result. Credit scoringA statistical technique wherein several financial characteristics are combined to form a single Credit spreadRelated:Quality spread Credit TermsConditions under which credit is extended by a lender to a borrower. Credit Unioncredit unions are community based financial co-operatives and most offer a full range of services. All are owned and controlled by members who are also shareholders. credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation. Crediting rateThe interest rate offered on an investment type insurance policy. CreditorLender of money. CreditorPerson or business that is owed money. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. Creditor Proof ProtectionThe creditor proof status of such things as life insurance, non-registered life insurance investments, life insurance RRSPs and life insurance RRIFs make these attractive products for high net worth individuals, professionals and business owners who may have creditor concerns. Under most circumstances the creditor proof rules of the different provincial insurance acts take priority over the federal bankruptcy rules. CreditorsPurchases of goods or services from suppliers on credit to whom the debt is not yet paid. Or a Critical Illness Insurance (Credit Insurance)Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing. Debt (Credit Insurance)Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured. Delivery policyA company’s stated goal for how soon a customer order will be Demand line of creditA bank line of credit that enables a customer to borrow on a daily or on-demand basis. Demand Management PolicyFiscal or monetary policy designed to influence aggregate demand for goods and services. Disability Insurance (Credit Insurance)Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. Discretionary PolicyA policy that is a conscious, considered response to each situation as it arises. Contrast with policy rule. Dividend policyAn established guide for the firm to determine the amount of money it will pay as dividends. Dividend PolicyThis policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class. EurocreditsIntermediate-term loans of Eurocurrencies made by banking syndicates to corporate and Evergreen creditRevolving credit without maturity. Export Credit InsuranceThe granting of insurance to cover the commercial and political risks of selling in foreign markets. Federal credit agenciesAgencies of the federal government set up to supply credit to various classes of Fiscal policyThe use of government spending and taxing for the specific purpose of stabilizing the economy. Fiscal PolicyA change in government spending or taxing, designed to influence economic activity. Five Cs of creditFive characteristics that are used to form a judgement about a customer's creditworthiness: Foreign tax creditHome country credit against domestic income tax for foreign taxes paid on foreign Formalized Line of CreditA contractual commitment to make loans to a particular borrower up to a specified maximum during a specified period, usually one year. Full Credit PeriodThe period of trade credit given by a supplier to its customer. Full faith-and-credit obligationsThe security pledges for larger municipal bond issuers, such as states and Incomes PolicyA policy designed to lower inflation without reducing aggregate demand. Wage/price controls are an example. Investment tax creditProportion of new capital investment that can be used to reduce a company's tax bill Investment Tax CreditA reduction in taxes offered to firms to induce them to increase investment spending. Job Loss Insurance (Credit Insurance)Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing. Joint Policy LifeOne insurance policy that covers two lives, and generally provides for payment at the time of the first insured's death. It could also be structured to pay on second death basis for estate planning purposes. Lease (Credit Insurance)Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee. Lender (Credit Insurance)Individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers. Lending PolicyA course of action adopted by a financial institution to guide and usually determine present and future decisions in the light of given conditions. Letter of credit (L/C)A form of guarantee of payment issued by a bank used to guarantee the payment of Letters of CreditA letter of credit is a guarantee of payment by a bank (issuing institution)to a third party for a specific amount of money, if certain conditions are met. Life Insurance (Credit Insurance)Group Term life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid. Line of credit An informal arrangement between a bank and a customer establishing a maximum loan Line of creditAn informal arrangement between a bank and a customer establishing a maximum loan line of creditAgreement by a bank that a company may borrow at any time up to an established limit. Line of CreditAn agreement negotiated between a borrower and a lender which establishes the maximum amount against which a borrower may draw. The agreement also sets out other conditions, such as how and when money borrowed against the line of credit is to be repaid. line of creditA revolving source of credit with a pre-established limit. You access the funds only as you need them, and any amount that you pay back becomes accessible to you again. Unlike a personal loan, a line of credit permits you to write cheques and make bank machine withdrawals, and requires you to pay interest only on the funds that you actually use. Monetary policyActions taken by the Board of Governors of the Federal Reserve System to influence the Monetary PolicyActions taken by the central bank to change the supply of money and the interest rate and thereby affect economic activity. Mortgage (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for purposes of purchasing a loan secured by a home. Mortgage Life insurance (Credit Insurance)Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage. Non-participating PolicyA type of insurance policy or annuity in which the owner does not receive dividends. Operating Line of CreditA bank's commitment to make loans to a particular borrower up to a specified maximum for a specified period, usually one year. Participating PolicyA policy offers the potential of sharing in the success of an insurance company through the receipt of dividends. Perfect market view (of dividend policy)Analysis of a decision on dividend policy, in a perfect capital Personal Line of credit (Credit Insurance)A bank's commitment to make loans to a borrower up to a specified maximum during a specific period, usually one year. personal line of credit (PLC)A revolving source of credit with a pre-established limit. You access the funds only as you need them, and any amount that you pay back becomes accessible to you again. Unlike a personal loan, a PLC permits you to write cheques and make bank machine withdrawals, and requires you to pay interest only on the funds that you actually use. PolicyA written document that serves as evidence of insurance coverage and contains pertinent information about the benefits, coverage and owner, as well as its associated directives and obligations. Policy Acquisition CostsCosts incurred by insurance companies in signing new policies, including expenditures on commissions and other selling expenses, promotion expenses, premium Policy AnniversaryYearly event linked to a policy. Usually the date issued. Policy asset allocationA long-term asset allocation method, in which the investor seeks to assess an Policy DateDate on which the insurance company assumes responsibilities for the obligations outlined in a policy. Policy FeeThis is an administrative fee which is part of most life insurance policies. It ranges from about $40 to as much as $100 per year per policy. It is not a separate fee. It is incorporated in the regular monthly, quarterly, semi-annual or annual payment that you make for your policy. Knowing about this hidden fee is important because some insurance companies offer a policy fee discount on additional policies purchased under certain conditions. Sometimes they reduce the policy fee or waive it altogether on one or more additional policies purchased at the same time and billed to the same address. The rules are slightly different depending on the insurance company. There could be enormous savings if several people in the same family or business were intending to purchase coverage at the same time. Policy FeeAdministrative charge included in a policy Premium. Policy-Ineffectiveness PropositionTheory that anticipated policy has no effect on output. Policy RuleA formula for determining policy. Contrast with discretionary policy. Policy YearPeriod between two policy anniversaries. PolicyholderThis is the person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation. There are instances in marriage breakup (or relationship breakup with dependent children) where appropriate life insurance on the support provider, owned and paid for by the ex-spouse receiving the support is an acceptable method of ensuring future security. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |