Financial Term Glossary
Before we supply you with any of our products we want to be sure that paying for it will fit within your weekly budget. So we do what we call an Affordability Check which looks at your income and how much you spend on things like rent and utility bills. So when you come in to complete the agreement you need to bring a wage slip, bank statement and/or proof of the benefits you're receiving to help us to do this.
This is a document that we will send you each year to show you how much you have paid for your BrightHouse hire purchase agreements, what you still have to pay and the interest we have charged you.
Annual Percentage Rate (APR)
The Annual Percentage Rate, or APR, is a way of showing how much interest you will pay each year on the product or products that you are buying from BrightHouse. The rate of your APR will depend on a number of factors including your credit rating and your repayment history.
The balance is the amount that you have outstanding on your BrightHouse agreement until they will be paid for fully.
Your budget is the amount of money that you have to spend each month compared with your income. After deducting what you spend from the income you receive, we work out what you have left over to assess if you are able to afford the weekly/monthly payments.
Citizens' Advice Bureau
The Citizen's Advice Bureau is a free service that is available to give basic legal advice on a wide range of topics from your rights at work to money matters. There are Citizens' Advice Bureau all around the UK and they also offer a great deal of online advice too
County Court Judgement
A County Court Judgment, also known as a CCJ, is a court order that can be registered against you when you have been taken to court for failing to repay money that you owe. When you apply for any kind of credit you are usually asked if you have any CCJs against your name.
Credit is when a company agrees to provide you with a product or service before you pay for it in full. In exchange for providing it before full payment's received you generally have to pay a fixed amount each week, month or year with interest added.
This is a legally binding agreement between a business and a customer in which the business agrees to provide goods or services before full payment is received and the customer agrees to pay a specified amount at agreed intervals, usually including an additional amount of interest.
A credit allowance, also sometimes called a credit limit, is the total amount of credit that a company agrees to provide to a customer.
Credit Bureau Check
Before agreeing to give credit a business will do a credit bureau check on a customer. This gives information about their credit history, whether they have failed to make any payments to creditors in the past and also how many credit checks have been made on the person in the past.
A person's credit file contains information about their credit history including their payment history, the amount of credit they have outstanding and any county court judgements they may have against them. Creditors use this information to decide whether or not to offer credit and what interest rate to charge.
A person's credit rating is a number which expresses what kind of credit risk they are to a lender. It is calculated by a credit reference agency using a wide range of information including payment history, levels of debt and time spent living at the same address.
Credit Reference Agency (CRA)
This is an agency that gathers a person's credit information together and uses it to calculate their credit rating. Potential creditors like banks, credit card companies and other businesses use the credit reference agency to provide information about a person's creditworthiness.
A person's credit score, also sometimes known as a credit rating, is a score measured a set number of criteria to measure their level of creditworthiness. It is calculated by a credit reference agency using information about their credit history.
An assessment of the likelihood that a borrower will default on his or her debt obligations. It is based upon factors, such as his/her history of repayment and credit score.
A deposit is a fixed sum which someone looking for credit can be asked to pay in advance. The amount of deposit is deducted from the total amount of credit being offered and the borrower only has to repay the balance, along with any interest that may be due. At BrightHouse, we do not ask for a deposit on our products.
The electoral roll is the list of all the people in a particular area who are registered to vote in local or national elections. Being on the electoral roll can help to improve a person's credit score.
Expenditure is the amount that you have to pay each month for everything from rent to groceries and utilities to travel. Your expenditure is balanced with your income when your creditworthiness is being assessed.
A finance charge is the amount charged for giving credit. When you buy from BrightHouse this comes in the form of the interest we charge over and above the actual cost of the product.
This refers to a situation in which you might be finding it hard to meet all your financial commitments like rent, bills and other expenses. If you ever find yourself in financial difficulty the firststep will be to discuss your situation with the organisations who you are unable to pay. ¬†¬
A fixed rate means that the Annual Percentage Rate (APR) that you are paying for any credit will not change over the term of the credit agreement.
Financial Ombudsman Service (FOS)
If you have an issue with a bank, insurer or credit provider which they have not been able to resolve directly with them then the Financial Ombudsmen Service is an independent organisation that will listen to both sides of the dispute and help to reach a fair resolution.
If you are experiencing financial hardship, forbearance options are a form of repayment relief granted by the lender. Postponing or reducing your payments may help you avoiddefaulting.
This is a check that is carried out to ensure that anyone applying for credit really is who they say they are and to ensure that they are being truthful in their application. It may also look into whether a person has ever been convicted of fraud in the past.
This is an arrangement in which a seller provides a product which the buyer pays for in instalments over an agreed period of time. Until the payments have all been made the item remains the property of the seller who has the right to reclaim it if the buyer fails to make the agreed payments.
Hire Purchase Agreement
This is the legal contract that sets out the terms and conditions of any hire purchase transactions and which is signed by both the seller and the buyer.
Income refers to all the money that you have coming in each week or month and includes wages, benefits and even rent if you let out part of your home to someone else. The level of your income, balanced with your outgoings, is an important deciding factor in the amount of credit you will be offered.
This is designed to outline the responsibilities of a lender to its borrowers. Among the areas it usually covers are the lender's commitment to being clear about the terms and conditions of the credit, the care they will take to ensure that the credit is affordable and the help that they will give if the borrower finds themselves in financial difficulties.
Money Advice Service (MAS)
The Money Advice Service is a free and impartial advice service that has been set up by the government to offer help with every aspect of a person's finances. These include what to do if you find yourself in debt, help with benefits, saving for retirement and even how to prepare financially for major life changes like having a baby or separating from a partner.
A free and confidential debt advice service which helps people deal with their debts. By visiting the National Debtline website you can find guides, fact sheets, budgeting tools and sample letters to use to contact creditors. They also offer debt advice by webchat, email or over their helpline.¬
Rent to Own
This is another way to describe hire purchase in which a product is bought using regular instalments over an agreed period of time. The product remains the property of the seller until it is fully paid off. If any payments are missed the seller has the right to take back the product.
Step Change is a charity that helps with debt advice and which can also help to draw up a Debt Management Plan which agrees an affordable debt repayment plan with a person's creditors as well as advising on the numerous other options that may be available.