A cut-off score is the minimum score that a borrower must achieve on a credit scoring model in order to be approved for a loan or credit card. The cut-off score is set by the lender, and is based on the lender’s internal risk management criteria. For example, a lender may set a cut-off score … Read more
An adverse credit history is a record of late or missed payments, defaults, bankruptcies, or other financial problems. It can make it difficult to get approved for loans, credit cards, and other forms of credit. Lenders may also charge higher interest rates and fees for borrowers with an adverse credit history. What is the lowest … Read more
An interest rate cap is an upper limit on the interest rate that can be charged on a loan. This can help to save money on the loan by preventing the interest rate from rising above a certain level. What does a 5’1 5 ARM mean? A 5-1 ARM is an adjustable-rate mortgage (ARM) loan … Read more
Over-collateralization (OC) is the practice of using more collateral than is necessary to secure a loan. This provides a cushion for the lender in the event that the borrower defaults on the loan. OC is often used in the context of secured loans, such as mortgages. What does fully collateralized mean? In the context of … Read more
