A Plain-Language Lending and Origination Glossary

A lender's assessment of whether an applicant has a reasonable capacity to make the payments required under a proposed credit obligation. Specific ability-to-repay requirements and how they are evaluated vary by product, program, and applicable law.

See also Debt-to-Income Ratio (DTI), Disposable Income, Payment-to-Income Ratio (PTI), Underwriting

Optional products offered in connection with a vehicle purchase or financing transaction, such as vehicle service contracts, GAP products, maintenance plans, or protective coatings. Lender policy determines whether and to what extent add-on products may be included in the amount financed.

See also Amount Financed, Back-End Gross, Finance and Insurance (F&I), GAP — Guaranteed Asset Protection, Service Contract, VSC — Vehicle Service Contract, Warranty

The act of rendering a decision on a submitted application. In lending systems the term is often used interchangeably with decisioning, though some organizations reserve it for the final authorized decision rather than an interim system recommendation.

See also Credit Decision, Decision Engine, Decisioning, Underwriting

The maximum amount a lender is willing to finance on a transaction, commonly expressed as a percentage of a stated collateral value or of the vehicle's cash price. Advance rates are typically defined within a lender's credit policy and may vary by risk tier, collateral type, or program.

See also Book Value, Collateral, Credit Policy, Loan-to-Value Ratio (LTV), Risk Tier, Valuation Source

A decision that negatively affects a credit applicant, such as declining an application or, in certain circumstances, offering credit on materially different terms. Federal laws including ECOA and FCRA establish notification requirements when adverse action occurs.

See also Counteroffer, Credit Decision, Credit Report, Decline, ECOA — Equal Credit Opportunity Act, Fair Lending, FCRA — Fair Credit Reporting Act, Notice to Cosigner, Reason Code, Regulation B / Reg B, Risk-Based Pricing Notice, Turndown

Source: Federal Trade Commission

The process of repaying a loan through scheduled payments that reduce principal and pay interest over time.

See also Amortization Schedule, Balloon Payment, Interest, Payment Schedule, Principal, Simple Interest, Term

A table showing how each scheduled payment on a loan is expected to be applied between principal and interest, and the projected remaining balance after each payment.

See also Amortization, Curtailment, Maturity Date, Payment Amount, Payment Schedule, Principal, Reamortization

A Truth in Lending disclosure representing the amount of credit provided to the borrower or on the borrower's behalf after certain prepaid finance charges are accounted for. It is not necessarily identical to the loan's principal balance or the dealer's Amount to Finance.

See also Add-On Products, Amount to Finance (ATF), Annual Percentage Rate (APR), Finance Charge, Origination Fee, Principal, Regulation Z / Reg Z, TILA — Truth in Lending Act, Total of Payments

Source: CFPB — Regulation Z §1026.18

An auto lending term generally referring to the amount a dealer or applicant is requesting to finance. The exact calculation can vary by lender and should not be confused with the Regulation Z term Amount Financed.

See also Amount Financed, Cash Price, Down Payment, Negative Equity, Rehash

A standardized annual measure of the cost of consumer credit. APR may include certain finance charges in addition to interest and therefore may differ from the stated interest rate.

See also Amount Financed, Buy Rate, Finance Charge, Interest Rate, MLA — Military Lending Act, Origination Fee, Regulation Z / Reg Z, TILA — Truth in Lending Act, Total of Payments, Usury, Zero Percent Financing

Source: CFPB — Regulation Z §1026.22

A defined interface that allows one software system to exchange data or trigger actions in another. In lending, APIs commonly connect a loan origination system to credit bureaus, decisioning services, dealer management systems, verification providers, and servicing platforms.

See also Core System, Data Mapping, Dealer Management System (DMS), Loan Origination System (LOS)

A person or business requesting credit from a lender.

See also Application, Borrower, Co-Borrower, Cosigner, Credit Application, Loan Application

The information submitted to a lender for evaluation of a request for credit. In an indirect transaction, the application is commonly transmitted to the lender by a dealer or aggregator rather than by the consumer directly.

See also Applicant, Application Aggregator, Credit Application, Decisioning, Loan Application

A third-party service that collects credit applications from dealers and routes them to multiple participating lenders through a single connection, reducing the number of direct integrations each party must maintain.

See also Application, Dealer Management System (DMS), Dealer Portal, Indirect Lending, Waterfall (Lender Routing)

A lender's decision to extend credit subject to stated terms and any outstanding conditions.

See also Concurrence, Conditional Approval, Counteroffer, Credit Decision, Pre-Approval, Pull-Through Rate, Stipulation / Stip

The party that receives ownership or rights to a contract through an assignment. In indirect auto finance, a dealer commonly assigns a retail installment contract to a lender.

See also Assignment, Indirect Lending, Recourse, Retail Installment Contract (RIC)

The transfer of a loan, retail installment contract, or related rights from one party to another.

See also Assignee, Contract, Contract in Transit, Dealer Agreement, Discount, eVault, Funding, Indirect Lending, Non-Recourse, Recourse, Retail Installment Contract (RIC), Retail Installment Sales Contract (RISC)

The use of software, rules, models, scorecards, or other automated processes to evaluate an application and generate a credit decision or recommendation.

See also Business Rules Engine, Custom Scorecard, Decision Engine, Decisioning, Manual Underwriting, Override, Reason Code, Scorecard, Underwriting, Workflow Automation

Dealership profit generated in the finance and insurance office rather than from the vehicle sale itself, such as income from financing arrangements and optional add-on products.

See also Add-On Products, Dealer Participation, Dealer Reserve, Finance and Insurance (F&I), Front-End Gross

A scheduled final payment that is substantially larger than the preceding regular payments. Balloon structures may be subject to specific disclosure and program requirements.

See also Amortization, Maturity Date, Payment Schedule, Residual Value

A legal process through which individuals or businesses seek relief from or restructuring of debts.

See also Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Charge-Off, Derogatory Credit, Repossession / Repo

The process of transferring a newly originated or acquired loan and its associated data into a loan servicing or account management system.

See also Booking, Core System, Funding, Loan Servicing, Servicer

An estimated value of a vehicle or other asset obtained from an industry valuation source. Lenders may use book value when calculating LTV or establishing collateral requirements.

See also Advance Rate, Collateral, Equity, Loan-to-Value Ratio (LTV), Mileage, Mileage Adjustment, MSRP — Manufacturer's Suggested Retail Price, Power Booking, Residual Value, Valuation Source, Vehicle History Report, VIN — Vehicle Identification Number, Vehicle Options, Year, Make, Model

The process of establishing an approved and funded loan as an active account in the lender's accounting, core, or servicing system. Booking and boarding are sometimes used interchangeably.

See also Boarding, Core System, Funding, Loan Number, Loan Servicing

A person or business that receives credit and is contractually responsible for repayment.

See also Applicant, Co-Borrower, Cosigner, Guarantor

A secure online system through which a borrower can view account information, make payments, retrieve documents, request a payoff, or complete tasks related to an application or existing loan.

See also Dealer Portal, Direct Lending, Electronic Signature / eSign, Loan Servicing, Payoff, Servicer

The framework of laws, regulations, and internal programs directed at detecting, preventing, and reporting money laundering and related financial crimes. Obligations vary by institution type and activity.

See also CIP — Customer Identification Program, Fraud Detection, KYC — Know Your Customer, OFAC — Office of Foreign Assets Control

Common shorthand for a consumer reporting agency or credit bureau such as Equifax, Experian, or TransUnion.

See also Bureau Score, Credit Bureau / Consumer Reporting Agency (CRA), Credit File, Credit Report

A credit score generated from information in a consumer's file at a consumer reporting agency using a scoring model, as distinguished from a lender's own internally developed score.

See also Bureau, Credit Score, Custom Scorecard, FICO® Score, Reason Code, VantageScore®

Software that evaluates configurable rules against application or loan data to produce outcomes, route work, or enforce policy, allowing lending logic to be maintained without changing underlying application code.

See also Automated Decisioning, Credit Policy, Decision Engine, Scorecard, Workflow, Workflow Automation

The interest rate at which a lender approves a transaction before any dealer participation is added. The difference between the buy rate and the contract rate is a common basis for dealer compensation.

See also Annual Percentage Rate (APR), Dealer Participation, Dealer Reserve, Interest Rate, Risk-Based Pricing, Yield

The price at which goods or a vehicle are sold before the cost of financing is considered.

See also Amount to Finance (ATF), Down Payment, Front-End Gross, MSRP — Manufacturer's Suggested Retail Price, Trade-In Allowance, Zero Percent Financing

The document or electronic record issued by a state authority establishing ownership of a vehicle and identifying any recorded lienholders.

See also Floor Plan Financing, Lien, Lien Perfection, Lienholder, Odometer Disclosure, Title

A form of bankruptcy that generally allows an individual with regular income to repay some or all qualifying debts through a court-approved repayment plan.

See also Bankruptcy, Chapter 7 Bankruptcy, Derogatory Credit

A form of bankruptcy generally involving liquidation of eligible non-exempt assets and discharge of qualifying debts.

See also Bankruptcy, Chapter 13 Bankruptcy, Derogatory Credit

An accounting action in which a creditor recognizes a delinquent debt as unlikely to be collected. A charge-off does not necessarily eliminate the borrower's obligation to repay the debt.

See also Bankruptcy, Days Past Due (DPD), Default, Deficiency Balance, Delinquency, Derogatory Credit, Loss Given Default, Workout, Write-Off

An institution's documented program for collecting and verifying identifying information about customers, including procedures for what information is obtained and how identity is confirmed.

See also BSA/AML, Identity Verification, KYC — Know Your Customer, Knowledge-Based Authentication (KBA), OFAC — Office of Foreign Assets Control

A second borrower who applies jointly for credit and shares responsibility for repayment. A co-borrower typically has an ownership interest in the financed property.

See also Applicant, Borrower, Cosigner, Guarantor, Joint Credit

Property pledged to secure a loan. A vehicle is commonly the collateral securing an automotive loan or retail installment contract.

See also Advance Rate, Book Value, Collateral Protection Insurance (CPI), Floor Plan Financing, Lien, Loan-to-Value Ratio (LTV), Proof of Insurance, PMSI — Purchase Money Security Interest, Repossession / Repo, Secured Loan, UCC-1 Financing Statement, Unsecured Loan

Insurance a lender may obtain to protect its interest in collateral when a borrower fails to maintain required coverage. The cost is commonly charged to the borrower, subject to contract terms and applicable law.

See also Collateral, GAP — Guaranteed Asset Protection, Proof of Insurance, Total Loss

A secondary review or approval required from another authorized person before a credit decision, exception, or transaction can proceed.

See also Approval, Dual Control, Exception, Lending Authority, Override

A credit approval that remains subject to one or more requirements, such as income verification, proof of insurance, documentation, or changes to the proposed deal structure.

See also Approval, Counteroffer, Credit Decision, Employment Verification (VOE), Funding Packet, Income Verification, Pre-Approval, Rehash, Spot Delivery, Stipulation / Stip, Verification

A legally binding agreement establishing the rights and obligations of the parties to a transaction.

See also Assignment, Electronic Contracting / eContracting, Retail Installment Contract (RIC)

A completed retail installment contract that a dealer has sent to a lender but for which funding has not yet been received. Contracts in transit represent a receivable to the dealer and a pending obligation for the lender.

See also Assignment, Funding, Funding Packet, Mail-Away Deal, Net Check, Spot Delivery

The primary system of record a financial institution uses for accounts, balances, transactions, and general ledger activity. Originated loans are typically boarded to the core after funding.

See also API — Application Programming Interface, Boarding, Booking, Data Mapping, Loan Number, Loan Origination System (LOS), Loan Servicing

A person who agrees to be responsible for repaying a debt if the primary borrower does not, but who typically does not take an ownership interest in the financed property. This distinguishes a cosigner from a co-borrower.

See also Applicant, Borrower, Co-Borrower, Guarantor, Joint Credit, Notice to Cosigner

A lender's response offering credit on terms different from those requested, such as a different amount financed, term, rate, or down payment. Depending on the circumstances and applicable law, a counteroffer may trigger adverse action requirements.

See also Adverse Action, Approval, Conditional Approval, Credit Decision, Decline, Rehash

An application requesting information a lender uses to evaluate an applicant for credit. What constitutes an application for regulatory purposes is defined by rule and may differ from a lender's internal usage.

See also Applicant, Application, Loan Application, Regulation B / Reg B

An organization that collects and maintains consumer credit information and provides credit reports and related information to authorized users.

See also Bureau, Credit File, Credit Report, Data Furnisher, FCRA — Fair Credit Reporting Act

The outcome of a lender's evaluation of an application, such as approve, decline, counteroffer, or conditional approval.

See also Adjudication, Adverse Action, Approval, Conditional Approval, Counteroffer, Credit Policy, Decisioning, Decline, Rehash

The collection of information maintained by a consumer reporting agency about a consumer's credit history.

See also Bureau, Credit Bureau / Consumer Reporting Agency (CRA), Credit Freeze, Credit Report, Fraud Alert, Thin Credit File, Tradeline

A restriction placed on a consumer's credit file that generally prevents prospective creditors from accessing it for new credit without authorization.

See also Credit File, Credit Inquiry, Fraud Alert, Identity Verification

A record created when a party accesses a consumer's credit report.

See also Credit Freeze, Credit Report, Hard Inquiry / Hard Pull, Permissible Purpose, Soft Inquiry / Soft Pull

A lender's documented standards governing credit eligibility, underwriting, pricing, limits, exceptions, and related lending decisions.

See also Advance Rate, Business Rules Engine, Credit Decision, Decision Engine, Exception, Fair Lending, Lending Authority, Loan-to-Value Ratio (LTV), MLA — Military Lending Act, Risk Tier, Underwriting, Usury

A report containing information from a consumer's credit file, such as credit accounts, payment history, balances, inquiries, and certain public-record information.

See also Adverse Action, Bureau, Credit Bureau / Consumer Reporting Agency (CRA), Credit File, Credit Inquiry, Data Furnisher, Derogatory Credit, FCRA — Fair Credit Reporting Act, FICO® Score, Judgment, Permissible Purpose, Regulation V / Reg V, Risk-Based Pricing Notice, Tradeline, VantageScore®

The risk that a borrower will fail to repay a credit obligation as agreed.

See also Credit Score, Default, Loss Given Default, Portfolio, Risk-Based Pricing, Risk Tier, Subprime, Unsecured Loan

A numerical value produced by a scoring model to estimate credit risk based on information available to that model.

See also Bureau Score, Credit Risk, Derogatory Credit, FICO® Score, Hard Inquiry / Hard Pull, Prime, Reason Code, Risk-Based Pricing, Risk Tier, Scorecard, Subprime, Thin Credit File, VantageScore®

A payment applied to reduce the principal balance of a loan beyond the amount scheduled, which may shorten the remaining term or reduce total interest depending on the loan's structure.

See also Amortization Schedule, Payment Waterfall, Payoff, Prepayment Penalty, Principal, Reamortization, Simple Interest, Suspense Account

A scoring model developed using a lender's own portfolio performance data rather than obtained from a third-party model provider. Custom scorecards are typically built to reflect a specific product, market, or applicant population.

See also Automated Decisioning, Bureau Score, Decision Engine, Reason Code, Scorecard

An entity that reports information about consumer accounts to a consumer reporting agency. Furnishers have obligations regarding accuracy and the investigation of disputed information.

See also Credit Bureau / Consumer Reporting Agency (CRA), Credit Report, FCRA — Fair Credit Reporting Act, Regulation V / Reg V, Tradeline

The definition of how fields in one system correspond to fields in another, enabling data to move accurately between an origination system and connected bureaus, dealer systems, decisioning services, or servicing platforms.

See also API — Application Programming Interface, Core System, Dealer Management System (DMS), Loan Number, Loan Origination System (LOS), OCR — Optical Character Recognition

The number of days elapsed since the oldest unpaid scheduled payment became due. DPD is commonly used to bucket accounts for collections activity and portfolio reporting.

See also Charge-Off, Default, Delinquency, Delinquent, Past Due

The collection of documents associated with a vehicle sale and financing transaction, historically a physical folder and now commonly an electronic record set.

See also Dealer Management System (DMS), Document Management, Funding Packet, Odometer Disclosure, Retail Installment Contract (RIC), Stipulation / Stip

The contract between a lender and a dealer establishing the terms under which the lender will consider, purchase, and fund retail installment contracts originated by that dealer, including representations, repurchase obligations, and compensation terms.

See also Assignment, Floor Plan Financing, Indirect Lending, Non-Recourse, Pull-Through Rate, Recourse, Reserve Chargeback, Retail Installment Sales Contract (RISC)

Software used by automotive dealerships to manage operations such as inventory, sales, customers, accounting, financing, and vehicle transactions.

See also API — Application Programming Interface, Application Aggregator, Data Mapping, Deal Jacket, Dealer Portal

Compensation a dealer may receive in connection with arranging financing, commonly based on some portion of the difference between a lender's approved rate and the contract rate. It is sometimes called dealer reserve or finance participation.

See also Back-End Gross, Buy Rate, Dealer Reserve, Finance and Insurance (F&I), Flat Fee, Loan Participation, Net Check, Participation, Reserve Chargeback

A secure online system through which dealers can submit credit applications, review decisions, upload documents, communicate with lenders, and manage financing transactions.

See also Application Aggregator, Borrower Portal, Dealer Management System (DMS), Indirect Lending, Loan Origination System (LOS), Single Sign-On, Stipulation / Stip

Another term commonly used for dealer participation or dealer finance income associated with arranging financing.

See also Back-End Gross, Buy Rate, Dealer Participation, Flat Fee, Participation, Reserve Chargeback

A measure comparing a borrower's recurring monthly debt obligations with monthly income. Lenders use DTI as one indicator of repayment capacity.

See also Ability to Repay, Disposable Income, Gross Monthly Income, Payment-to-Income Ratio (PTI), Underwriting

Software that applies lending policies, rules, calculations, scorecards, and other criteria to assist with or automate credit decisions.

See also Adjudication, Automated Decisioning, Business Rules Engine, Credit Policy, Custom Scorecard, Decisioning, Loan Origination System (LOS), Override, Scorecard

The process through which a lender evaluates an application and reaches a credit decision.

See also Adjudication, Application, Automated Decisioning, Credit Decision, Decision Engine, Loan Origination, Underwriting

A credit decision not to extend the requested credit. A decline generally constitutes adverse action and may carry notification requirements.

See also Adverse Action, Counteroffer, Credit Decision, Reason Code, Turndown

A borrower's failure to meet an obligation under a credit agreement. What constitutes default, and what remedies become available, are governed by the contract and applicable law.

See also Charge-Off, Credit Risk, Days Past Due (DPD), Delinquency, Forbearance, Judgment, Loss Given Default, Repossession / Repo, Right to Cure, SCRA — Servicemembers Civil Relief Act, Skip Tracing, Workout

An arrangement postponing one or more scheduled payments. Deferments generally extend the loan and may increase total interest paid, subject to contract terms and program limits.

See also Forbearance, Loan Modification, Payment Extension, Skip Payment, Workout

The amount that may remain owed after collateral is repossessed and sold when the sale proceeds and other credits do not satisfy the outstanding obligation, subject to applicable law and contract terms.

See also Charge-Off, GAP — Guaranteed Asset Protection, GAP Waiver, Judgment, Loss Given Default, Repossession / Repo, Total Loss, Write-Off

The condition that occurs when a required payment has not been made by its due date.

See also Charge-Off, Days Past Due (DPD), Default, Delinquent, Grace Period, Late Fee, Loan Servicing, Past Due, Right to Cure, Skip Tracing

Describes a loan or credit obligation with one or more payments past due.

See also Days Past Due (DPD), Delinquency, Past Due

Negative information on a credit report, such as serious delinquencies, charge-offs, collections, repossessions, or certain bankruptcies.

See also Bankruptcy, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Charge-Off, Credit Report, Credit Score, Judgment, Repossession / Repo, Tradeline

Lending in which the borrower applies directly to the financial institution rather than obtaining financing through a dealer or other intermediary.

See also Borrower Portal, Indirect Lending, Loan Origination, Pre-Approval

In indirect auto finance, an amount deducted from the value of a contract when a lender purchases or funds it. Discounts may reflect credit risk, deal structure, pricing, fees, or lender program requirements.

See also Assignment, Flat Fee, Funding, Net Check, Risk Tier

Income remaining after required taxes, debt obligations, or other specified expenses. Some lenders use disposable income as one measure of a borrower's ability to support a proposed payment.

See also Ability to Repay, Debt-to-Income Ratio (DTI), Net Monthly Income, Payment-to-Income Ratio (PTI)

The systems and processes used to capture, index, store, retrieve, and retain documents associated with an application or loan, including stipulation documents and executed contracts.

See also Deal Jacket, eVault, Funding Packet, OCR — Optical Character Recognition, Stipulation / Stip

Money or other value contributed by the buyer at the beginning of a purchase, reducing the amount that must be financed.

See also Amount to Finance (ATF), Cash Price, Loan-to-Value Ratio (LTV), Negative Equity, Rehash, Trade-In, Trade-In Allowance

A control requiring two authorized individuals to complete or approve a sensitive transaction or change, used to reduce the risk of error and fraud.

See also Concurrence, Exception, Lending Authority, User Role / Permissions

A federal law prohibiting discrimination in credit transactions based on protected characteristics established by law.

See also Adverse Action, Fair Lending, Joint Credit, Regulation B / Reg B

A federal taxpayer identification number generally assigned to businesses and other entities.

See also ITIN — Individual Taxpayer Identification Number, SSN — Social Security Number, Tax Identification Number (TIN)

The creation, execution, transmission, and management of credit contracts electronically.

See also Contract, Electronic Signature / eSign, eVault, Funding Packet, Retail Installment Contract (RIC)

An electronic process used to indicate a person's intent to sign or accept an agreement or document.

See also Borrower Portal, Electronic Contracting / eContracting, eVault, Identity Verification, Mail-Away Deal

Confirmation of an applicant's stated employer, employment status, or length of employment, obtained through documentation, a third-party service, or direct contact with the employer.

See also Conditional Approval, Income Verification, Stipulation / Stip, Verification

The difference between the value of an asset and the debt secured by that asset.

See also Book Value, Negative Equity, Payoff on Trade, Residual Value, Trade-In, Trade-In Allowance

A secure electronic repository used to store and manage authoritative electronic copies of certain financial documents and contracts.

See also Assignment, Document Management, Electronic Contracting / eContracting, Electronic Signature / eSign

A request or decision to approve a transaction outside one or more standard lending policy requirements.

See also Concurrence, Credit Policy, Dual Control, Lending Authority, Override, Underwriter

The body of laws, regulations, policies, and practices intended to ensure applicants and borrowers are treated fairly and without prohibited discrimination in credit transactions.

See also Adverse Action, Credit Policy, ECOA — Equal Credit Opportunity Act, MLA — Military Lending Act, Regulation B / Reg B, Risk-Based Pricing

The federal law governing many aspects of consumer reporting, including permissible access to consumer reports, accuracy, disputes, and notices when consumer report information contributes to adverse action.

See also Adverse Action, Credit Bureau / Consumer Reporting Agency (CRA), Credit Report, Data Furnisher, Permissible Purpose, Regulation V / Reg V, Risk-Based Pricing Notice

Source: Federal Trade Commission

A family of credit scores developed by FICO and used by lenders to help evaluate consumer credit risk. Different FICO models and industry-specific versions may produce different scores.

See also Bureau Score, Credit Report, Credit Score, Reason Code, VantageScore®

The dealership function that arranges vehicle financing and offers related products such as service contracts and GAP products.

See also Add-On Products, Back-End Gross, Dealer Participation, GAP — Guaranteed Asset Protection, Service Contract, VSC — Vehicle Service Contract

The cost of consumer credit expressed as a dollar amount under Regulation Z and calculated according to applicable rules.

See also Amount Financed, Annual Percentage Rate (APR), Interest, Origination Fee, Regulation Z / Reg Z, TILA — Truth in Lending Act, Total of Payments, Zero Percent Financing

Source: CFPB — Regulation Z §1026.4

A fixed amount of dealer compensation on a financed transaction, used in place of or alongside rate-based participation. Some lender programs use flats for specific products, rates, or terms.

See also Dealer Participation, Dealer Reserve, Discount, Net Check

A revolving line of credit a dealer uses to finance vehicle inventory, generally repaid as each vehicle is sold. Floor plan financing is a commercial obligation of the dealer and is distinct from consumer financing on a retail sale.

See also Certificate of Title, Collateral, Dealer Agreement, Payoff

An agreement in which a lender temporarily reduces or suspends payments, or refrains from exercising remedies, under specified conditions.

See also Default, Deferment, Loan Modification, Payment Extension, Skip Payment, Workout

A notice added to a consumer's credit file indicating that creditors should take additional steps to verify identity before extending new credit.

See also Credit File, Credit Freeze, Fraud Detection, Identity Verification

Processes, rules, data sources, and technology used to identify potentially fraudulent applications, identities, documents, or transactions.

See also BSA/AML, Fraud Alert, Fraud Score, Identity Verification, Knowledge-Based Authentication (KBA), Power Booking, Verification

A score produced by a model estimating the likelihood that an application, identity, or transaction is fraudulent, used to route work for additional review rather than to assess credit risk.

See also Fraud Detection, Identity Verification, Reason Code, Scorecard

Dealership profit generated from the vehicle sale itself, such as the difference between the selling price and the dealer's cost, as distinguished from finance and insurance income.

See also Back-End Gross, Cash Price, MSRP — Manufacturer's Suggested Retail Price, Trade-In Allowance

The stage at which a lender disburses money for an approved loan or purchased retail installment contract after required conditions have been satisfied.

See also Assignment, Boarding, Booking, Contract in Transit, Discount, Funding Packet, Loan Origination, Net Check, Pull-Through Rate, Stipulation / Stip

The collection of contracts, disclosures, verification documents, stipulations, and supporting information required by a lender before funding a transaction.

See also Conditional Approval, Contract in Transit, Deal Jacket, Document Management, Electronic Contracting / eContracting, Funding, Mail-Away Deal, Odometer Disclosure, Proof of Insurance, Retail Installment Contract (RIC), Stipulation / Stip

A contractual agreement under which a creditor agrees to waive some or all of a qualifying remaining balance following a covered total loss or theft, subject to the terms of the agreement. A GAP waiver is not necessarily the same thing as GAP insurance.

See also Deficiency Balance, GAP — Guaranteed Asset Protection, Total Loss

A general term for protection intended to address some or all of the difference between the outstanding finance obligation and amounts covered by primary vehicle insurance following a qualifying total loss or theft. Specific GAP products and legal treatment vary.

See also Add-On Products, Collateral Protection Insurance (CPI), Deficiency Balance, Finance and Insurance (F&I), GAP Waiver, Negative Equity, Total Loss

A federal law that includes requirements for financial institutions regarding the privacy and safeguarding of customer information, including notice practices and information security programs.

See also PII — Personally Identifiable Information, Regulation P / Reg P, SOC 2, User Role / Permissions

A period after a payment due date during which a payment may be accepted without a late fee or without being reported as late. Grace periods are defined by contract and applicable law and do not change the contractual due date.

See also Delinquency, Late Fee, Past Due, Payment Schedule

A borrower's monthly income before taxes and other deductions.

See also Debt-to-Income Ratio (DTI), Income Verification, Net Monthly Income, Payment-to-Income Ratio (PTI)

A person or entity that agrees to become responsible for a debt if the primary borrower does not fulfill the repayment obligation.

See also Borrower, Co-Borrower, Cosigner, Notice to Cosigner

An inquiry generally associated with an application for new credit. Hard inquiries are recorded on the consumer's credit report and may be considered by credit scoring models.

See also Credit Inquiry, Credit Score, Permissible Purpose, Soft Inquiry / Soft Pull

The process of confirming that an applicant is the person they claim to be, using documents, data sources, authentication challenges, or other methods.

See also Credit Freeze, CIP — Customer Identification Program, Electronic Signature / eSign, Fraud Alert, Fraud Detection, Fraud Score, ITIN — Individual Taxpayer Identification Number, KYC — Know Your Customer, Knowledge-Based Authentication (KBA), SSN — Social Security Number, Verification

Confirmation of an applicant's stated income through pay documentation, tax records, bank data, third-party services, or other acceptable evidence.

See also Conditional Approval, Employment Verification (VOE), Gross Monthly Income, OCR — Optical Character Recognition, Stipulation / Stip, Verification

A lending model in which a dealer or other intermediary originates or facilitates the consumer's financing and submits the transaction to one or more lenders.

See also Application Aggregator, Assignee, Assignment, Dealer Agreement, Dealer Portal, Direct Lending, Retail Installment Contract (RIC), Retail Installment Sales Contract (RISC), Waterfall (Lender Routing)

The amount charged for the use of borrowed money.

See also Amortization, Finance Charge, Interest Rate, Payment Waterfall, Precomputed Interest, Principal, Simple Interest, Unearned Interest

The percentage rate used to calculate interest on a loan. The interest rate is not necessarily the same as APR because APR may incorporate additional finance charges.

See also Annual Percentage Rate (APR), Buy Rate, Interest, Risk-Based Pricing, SCRA — Servicemembers Civil Relief Act, Term, Usury, Yield, Zero Percent Financing

A taxpayer identification number issued by the IRS to certain individuals who need a U.S. taxpayer identification number but are not eligible for an SSN.

See also EIN — Employer Identification Number, Identity Verification, SSN — Social Security Number, Tax Identification Number (TIN)

Credit for which two or more applicants apply together and expressly indicate an intent to be jointly responsible. Rules govern how intent to apply jointly must be evidenced.

See also Co-Borrower, Cosigner, ECOA — Equal Credit Opportunity Act, Notice to Cosigner, Regulation B / Reg B

A court determination that a party owes a debt. Judgments may affect a lender's evaluation of an applicant and may create enforcement rights for the judgment holder.

See also Credit Report, Default, Deficiency Balance, Derogatory Credit

An identity verification method that challenges an individual with questions derived from data sources, such as prior addresses or account details, that a legitimate applicant would be more likely to answer correctly.

See also CIP — Customer Identification Program, Fraud Detection, Identity Verification

The broader set of practices through which an institution identifies its customers, understands the nature of their activity, and monitors relationships for risk. CIP requirements form one component of a KYC program.

See also BSA/AML, CIP — Customer Identification Program, Identity Verification, OFAC — Office of Foreign Assets Control

A charge assessed when a payment is received after its due date or after any applicable grace period. Late fee amounts and timing are governed by the contract and applicable law.

See also Delinquency, Grace Period, Past Due, Payment Waterfall

The scope of credit decisions an individual is authorized to approve, typically defined by dollar amount, risk tier, product, or exception type.

See also Concurrence, Credit Policy, Dual Control, Exception, Override, Underwriter, User Role / Permissions

A legal claim or security interest in property used to secure repayment of a debt.

See also Certificate of Title, Collateral, Lien Perfection, Lienholder, PMSI — Purchase Money Security Interest, Secured Loan, Title, UCC-1 Financing Statement

The steps required to make a security interest effective against other parties, commonly by recording the lien on a vehicle title or filing a financing statement. Requirements and timing vary by state and collateral type.

See also Certificate of Title, Lien, PMSI — Purchase Money Security Interest, Title, UCC-1 Financing Statement

The party holding a security interest in collateral, recorded on the title or other applicable record.

See also Certificate of Title, Lien, Payoff, Repossession / Repo, Title

The information and documentation submitted by an applicant requesting a loan or other extension of credit.

See also Applicant, Application, Credit Application

A change to the contractual terms of an existing loan, such as the rate, term, or payment amount, agreed to after origination.

See also Deferment, Forbearance, Payment Extension, Reamortization, Refinance, Workout

The identifier assigned to a loan when it is established as an account, used to reference the obligation across origination, servicing, and accounting systems.

See also Booking, Core System, Data Mapping, Loan Servicing

The process of receiving, evaluating, underwriting, approving, documenting, and funding a new loan or credit transaction.

See also Decisioning, Direct Lending, Funding, Loan Origination System (LOS), Loan Servicing, Refinance, Underwriting

Software that manages the lending workflow from application through credit evaluation, underwriting, documentation, funding, and integrations with other lending systems.

See also API — Application Programming Interface, Core System, Data Mapping, Dealer Portal, Decision Engine, Loan Origination, Workflow, Workflow Automation

An arrangement in which multiple financial institutions share an interest in the same loan or pool of loans. This is different from dealer participation in indirect automotive lending.

See also Dealer Participation, Participation, Portfolio

The administration of a loan after origination, including payment processing, account maintenance, statements, collections, payoff processing, and other account activity.

See also Boarding, Booking, Borrower Portal, Core System, Delinquency, Loan Number, Loan Origination, Payment Waterfall, Payoff, Portfolio, Servicer, Skip Tracing, Suspense Account

A ratio comparing the loan amount or amount financed with the value of the collateral. Lenders may define the numerator, valuation source, and permitted LTV differently within their credit policies.

See also Advance Rate, Book Value, Collateral, Credit Policy, Down Payment, Negative Equity, Power Booking, Valuation Source

The portion of an exposure a lender expects to lose if a borrower defaults, after accounting for recoveries such as collateral sale proceeds.

See also Charge-Off, Credit Risk, Default, Deficiency Balance, Portfolio, Write-Off

A transaction in which contract documents are sent to the buyer to be signed remotely rather than executed in person at the dealership. Electronic contracting has reduced but not eliminated the practice.

See also Contract in Transit, Electronic Signature / eSign, Funding Packet, Spot Delivery

Credit evaluation performed by an underwriter rather than determined entirely through automated rules or models.

See also Automated Decisioning, Override, Queue, Thin Credit File, Underwriter, Underwriting

The scheduled date on which the final payment or remaining balance of a loan becomes due.

See also Amortization Schedule, Balloon Payment, Payment Extension, Payment Schedule, Skip Payment, Term

The recorded distance a vehicle has traveled, commonly considered when evaluating collateral value.

See also Book Value, Mileage Adjustment, Odometer Disclosure, Valuation Source

An increase or decrease applied to a vehicle's estimated value based on mileage relative to expected mileage for a comparable vehicle.

See also Book Value, Mileage, Valuation Source, Vehicle Options

A federal law establishing protections for covered members of the armed forces and their dependents in certain consumer credit transactions, including limits on the military annual percentage rate and required disclosures. Covered transactions and exclusions are defined by rule.

See also Annual Percentage Rate (APR), Credit Policy, Fair Lending, SCRA — Servicemembers Civil Relief Act

The price a manufacturer recommends for a new vehicle, including designated options. MSRP is a reference point rather than the transaction price and may differ from both the selling price and a lender's valuation.

See also Book Value, Cash Price, Front-End Gross, Vehicle Options

The condition in which the amount owed on an asset exceeds its value. In an auto transaction, negative equity from a trade-in may sometimes be included in the new financing subject to lender policy.

See also Amount to Finance (ATF), Down Payment, Equity, GAP — Guaranteed Asset Protection, Loan-to-Value Ratio (LTV), Payoff on Trade, Trade-In, Trade-In Allowance

The net amount a lender pays a dealer when funding a transaction after applicable discounts, fees, reserves, advances, or other adjustments are considered.

See also Contract in Transit, Dealer Participation, Discount, Flat Fee, Funding

Income remaining after applicable payroll taxes and deductions.

See also Disposable Income, Gross Monthly Income, Payment-to-Income Ratio (PTI)

A transaction structure in which the seller or originating party generally does not bear ordinary borrower credit losses after assignment, subject to contractual exceptions such as fraud or breach of representations.

See also Assignment, Dealer Agreement, Recourse, Reserve Chargeback

A disclosure that must be provided to a cosigner in certain consumer credit transactions explaining the obligations being assumed. Applicability depends on the transaction and applicable law.

See also Adverse Action, Cosigner, Guarantor, Joint Credit

Technology that converts text in images or scanned documents into machine-readable data, commonly used to extract information from paystubs, identification, titles, and other submitted documents.

See also Data Mapping, Document Management, Income Verification, Stipulation / Stip

A required statement of a vehicle's recorded mileage at the time of transfer, made in connection with title transfer under federal and state requirements.

See also Certificate of Title, Deal Jacket, Funding Packet, Mileage

An office of the U.S. Department of the Treasury that administers and enforces economic and trade sanctions programs. Lenders commonly incorporate sanctions screening into customer and transaction compliance processes.

See also BSA/AML, CIP — Customer Identification Program, KYC — Know Your Customer, Verification

Two regulatory categories of consumer credit. Closed-end credit is extended for a fixed amount with a defined repayment schedule, as in a vehicle loan. Open-end credit allows repeated borrowing up to a limit, as with a credit card. Disclosure requirements differ between the two.

See also Payment Schedule, Regulation Z / Reg Z, Retail Installment Contract (RIC), Term

A fee charged in connection with making a loan. Whether an origination fee is treated as a finance charge for disclosure purposes depends on applicable rules.

See also Amount Financed, Annual Percentage Rate (APR), Finance Charge

An authorized decision to replace or modify a result produced by an automated rule, scorecard, decision engine, or standard credit policy.

See also Automated Decisioning, Concurrence, Decision Engine, Exception, Lending Authority, Manual Underwriting

A context-dependent lending term. In indirect automotive finance it commonly refers to dealer participation, while in institutional lending it may refer to multiple lenders sharing interests in a loan.

See also Dealer Participation, Dealer Reserve, Loan Participation

A payment or amount that has not been paid by its contractual due date.

See also Days Past Due (DPD), Delinquency, Delinquent, Grace Period, Late Fee, Right to Cure, Suspense Account

The amount the borrower is required to pay on each scheduled payment date.

See also Amortization Schedule, Payment Schedule, Payment-to-Income Ratio (PTI), Reamortization, Total of Payments

An arrangement moving one or more due dates later in the schedule, extending the loan's maturity. Extensions are typically limited by program rules governing frequency and eligibility.

See also Deferment, Forbearance, Loan Modification, Maturity Date, Skip Payment

The dates and amounts of payments required under a credit agreement.

See also Amortization, Amortization Schedule, Balloon Payment, Grace Period, Maturity Date, Open-End and Closed-End Credit, Payment Amount, Regulation Z / Reg Z, Term, Total of Payments

The defined order in which a received payment is applied across interest, principal, fees, and other amounts owed. The order is governed by contract and applicable law and affects how quickly principal is reduced.

See also Curtailment, Interest, Late Fee, Loan Servicing, Principal, Suspense Account

A ratio comparing the proposed monthly loan payment with the borrower's monthly income. PTI is frequently used in automotive and consumer lending to evaluate payment affordability.

See also Ability to Repay, Debt-to-Income Ratio (DTI), Disposable Income, Gross Monthly Income, Net Monthly Income, Payment Amount

The amount required to fully satisfy an existing credit obligation as of a specified date.

See also Borrower Portal, Curtailment, Floor Plan Financing, Lienholder, Loan Servicing, Payoff on Trade, Precomputed Interest, Prepayment Penalty, Principal, Refinance, Reserve Chargeback, Rule of 78s, Simple Interest, Unearned Interest

The amount required to satisfy an existing loan or lien on a vehicle being traded as part of a new transaction.

See also Equity, Negative Equity, Payoff, Trade-In, Trade-In Allowance

A legally recognized reason under the FCRA for obtaining or using a consumer report.

See also Credit Inquiry, Credit Report, FCRA — Fair Credit Reporting Act, Hard Inquiry / Hard Pull, Soft Inquiry / Soft Pull

Information that identifies or can be used to identify a specific individual. Lending systems handle substantial PII and are typically subject to access controls, encryption, retention limits, and safeguarding requirements.

See also GLBA — Gramm-Leach-Bliley Act, Regulation P / Reg P, Single Sign-On, SOC 2, SSN — Social Security Number, User Role / Permissions

A security interest taken in property to secure the credit that enabled the borrower to acquire that property. PMSI status can affect priority relative to other creditors.

See also Collateral, Lien, Lien Perfection, UCC-1 Financing Statement

The collection of loans a lender holds, viewed in aggregate for purposes of performance measurement, risk management, and reporting.

See also Credit Risk, Loan Participation, Loan Servicing, Loss Given Default, Pull-Through Rate, Risk Tier, Servicer, Write-Off, Yield

Overstating a vehicle's equipment or options to inflate its book value and support a larger advance. Power booking is a form of misrepresentation and is a common target of lender verification controls.

See also Book Value, Fraud Detection, Loan-to-Value Ratio (LTV), Vehicle Options

An initial determination that an applicant satisfies specified lending criteria, generally subject to verification, final transaction details, or other conditions.

See also Approval, Conditional Approval, Direct Lending, Soft Inquiry / Soft Pull

An interest structure in which the total interest for the full term is calculated at origination and included in the contract balance. Early payoff typically involves a rebate of unearned interest calculated under a specified method.

See also Interest, Payoff, Rule of 78s, Simple Interest, Unearned Interest

A charge assessed when a borrower repays a loan before scheduled maturity. Permissibility and limits vary by product, state, and applicable law.

See also Curtailment, Payoff, Refinance, Rule of 78s, Unearned Interest

A general classification for applicants presenting lower estimated credit risk, often subdivided into near prime, prime, and super prime. These are conventional market labels rather than standardized definitions, and the score ranges assigned to each vary by lender and model.

See also Credit Score, Risk-Based Pricing, Risk Tier, Subprime

The portion of a debt representing borrowed funds, excluding interest and certain other charges.

See also Amortization, Amortization Schedule, Amount Financed, Curtailment, Interest, Payment Waterfall, Payoff

Evidence that required physical damage and liability coverage is in force on financed collateral, naming the lender as lienholder or loss payee as required.

See also Collateral, Collateral Protection Insurance (CPI), Funding Packet, Stipulation / Stip, Total Loss, Verification

The proportion of applications or approvals that ultimately result in funded loans. Pull-through is a common measure of the effectiveness of a lender's pricing, decisioning speed, and dealer relationships.

See also Approval, Dealer Agreement, Funding, Portfolio, Turndown, Waterfall (Lender Routing)

A worklist within a loan origination or servicing system that groups applications, loans, tasks, or exceptions requiring attention based on status, rules, ownership, or priority.

See also Manual Underwriting, Underwriter, User Role / Permissions, Waterfall (Lender Routing), Workflow, Workflow Automation

Recalculating a loan's remaining payment schedule, typically after a change in balance, rate, or term, to produce a revised payment amount or maturity.

See also Amortization Schedule, Curtailment, Loan Modification, Payment Amount

A code or explanation identifying important factors affecting a credit score, automated decision, or other lending result.

See also Adverse Action, Automated Decisioning, Bureau Score, Credit Score, Custom Scorecard, Decline, FICO® Score, Fraud Score, Scorecard

A contractual arrangement under which a dealer, seller, originator, or other party may be required to repurchase a loan, reimburse the lender, or otherwise bear specified losses under defined circumstances.

See also Assignee, Assignment, Dealer Agreement, Non-Recourse, Reserve Chargeback

Replacing an existing obligation with a new one, generally to change the rate, term, payment, or lender. A refinance originates a new loan rather than modifying the existing contract.

See also Loan Modification, Loan Origination, Payoff, Prepayment Penalty

The federal regulation implementing the Equal Credit Opportunity Act. It establishes requirements affecting credit applications, notifications, adverse action, discrimination, and other aspects of credit transactions.

See also Adverse Action, Credit Application, ECOA — Equal Credit Opportunity Act, Fair Lending, Joint Credit

The federal regulation implementing the privacy provisions of the Gramm-Leach-Bliley Act, addressing notices about privacy practices and limits on sharing certain customer information.

See also GLBA — Gramm-Leach-Bliley Act, PII — Personally Identifiable Information, SOC 2

The federal regulation implementing portions of the Fair Credit Reporting Act, including requirements affecting furnishers, risk-based pricing notices, and identity theft provisions.

See also Credit Report, Data Furnisher, FCRA — Fair Credit Reporting Act, Risk-Based Pricing Notice

The federal regulation implementing the Truth in Lending Act. Among other things, Regulation Z establishes consumer credit disclosure requirements involving APR, finance charges, amount financed, payment schedules, and total of payments.

See also Amount Financed, Annual Percentage Rate (APR), Finance Charge, Open-End and Closed-End Credit, Payment Schedule, TILA — Truth in Lending Act, Total of Payments

Source: CFPB — Regulation Z

An informal automotive finance term for restructuring or renegotiating a submitted deal after the initial credit decision, such as changing the term, amount financed, down payment, rate, vehicle, or other deal terms.

See also Amount to Finance (ATF), Conditional Approval, Counteroffer, Credit Decision, Down Payment, Spot Delivery

The process through which a creditor takes possession of collateral, such as a vehicle, following a qualifying default or other contractual right to repossess.

See also Bankruptcy, Collateral, Default, Deficiency Balance, Derogatory Credit, Lienholder, Right to Cure, SCRA — Servicemembers Civil Relief Act, Secured Loan, Skip Tracing

A lender's recovery of previously paid dealer participation when a loan pays off, is refinanced, or defaults within a defined period after funding. Chargeback terms are set in the dealer agreement.

See also Dealer Agreement, Dealer Participation, Dealer Reserve, Non-Recourse, Payoff, Recourse

The estimated value of a vehicle at the end of a defined period, used in balloon and lease-style structures to set the final obligation.

See also Balloon Payment, Book Value, Equity, Valuation Source

A contract documenting a retail installment transaction in which a buyer agrees to pay for goods, commonly a motor vehicle, over time.

See also Assignee, Assignment, Contract, Deal Jacket, Electronic Contracting / eContracting, Funding Packet, Indirect Lending, Open-End and Closed-End Credit, Retail Installment Sales Contract (RISC)

A common term for an automotive retail installment contract between a vehicle buyer and dealer. The dealer is typically the original creditor and may later assign the contract to a bank, credit union, or finance company.

See also Assignment, Dealer Agreement, Indirect Lending, Retail Installment Contract (RIC)

Source: Consumer Financial Protection Bureau

A borrower's opportunity, required in some states and circumstances, to bring a defaulted account current before a creditor may accelerate the balance or repossess collateral. Notice content and timing are set by applicable law.

See also Default, Delinquency, Past Due, Repossession / Repo

A lender-defined category used to group applications or borrowers according to estimated credit risk.

See also Advance Rate, Credit Policy, Credit Risk, Credit Score, Discount, Portfolio, Prime, Risk-Based Pricing, Subprime

The practice of setting loan pricing or other credit terms based in whole or in part on the estimated credit risk associated with the applicant or transaction.

See also Buy Rate, Credit Risk, Credit Score, Fair Lending, Interest Rate, Prime, Risk-Based Pricing Notice, Risk Tier, Subprime, Usury, Yield

A notice required in certain consumer credit situations when a consumer receives materially less favorable terms based on information in a consumer report.

See also Adverse Action, Credit Report, FCRA — Fair Credit Reporting Act, Regulation V / Reg V, Risk-Based Pricing

A method of allocating precomputed interest that assigns more interest to the early months of a loan, affecting the rebate calculated on early payoff. Its use is restricted or prohibited for certain loan types and terms under federal and state law.

See also Payoff, Precomputed Interest, Prepayment Penalty, Unearned Interest

A structured model or set of weighted criteria used to evaluate credit risk, fraud risk, policy compliance, or another aspect of an application and produce a score or classification.

See also Automated Decisioning, Business Rules Engine, Credit Score, Custom Scorecard, Decision Engine, Fraud Score, Reason Code

A federal law providing protections to eligible servicemembers on certain obligations incurred before active duty, which may include interest rate limits and restrictions on repossession and other actions without court order. Eligibility and scope are defined by law.

See also Default, Interest Rate, MLA — Military Lending Act, Repossession / Repo

A loan backed by collateral that the lender may have rights against if the borrower defaults.

See also Collateral, Lien, Repossession / Repo, Unsecured Loan

An optional contract providing specified repair, maintenance, or other benefits under defined conditions. A service contract is distinct from a manufacturer's warranty.

See also Add-On Products, Finance and Insurance (F&I), VSC — Vehicle Service Contract, Warranty

The party responsible for administering a loan after origination. The servicer may be the lender itself or a third party engaged to perform servicing functions.

See also Boarding, Borrower Portal, Loan Servicing, Portfolio

An interest structure in which interest accrues on the outstanding principal balance based on the days elapsed. Under simple interest, paying early or making extra principal payments reduces total interest paid.

See also Amortization, Curtailment, Interest, Payoff, Precomputed Interest, Unearned Interest

An authentication approach allowing users to access multiple systems with one set of managed credentials, commonly used to centralize access control and deprovisioning.

See also Dealer Portal, PII — Personally Identifiable Information, SOC 2, User Role / Permissions

A program allowing a borrower to omit a scheduled payment under defined conditions, typically extending the loan and increasing total interest.

See also Deferment, Forbearance, Maturity Date, Payment Extension

The process of locating a borrower or collateral when contact has been lost, using available data sources and permitted investigative methods.

See also Default, Delinquency, Loan Servicing, Repossession / Repo

A reporting framework for evaluating a service organization's controls relating to security and, where applicable, availability, processing integrity, confidentiality, and privacy. Lenders commonly review SOC 2 reports when assessing technology vendors.

See also GLBA — Gramm-Leach-Bliley Act, PII — Personally Identifiable Information, Regulation P / Reg P, Single Sign-On, User Role / Permissions

An access to credit information that is not treated as an application-generated hard inquiry and generally does not affect consumer credit scores.

See also Credit Inquiry, Hard Inquiry / Hard Pull, Permissible Purpose, Pre-Approval

Delivering a vehicle to a buyer before financing has been finally approved and assigned. If the transaction is not ultimately funded as written, the parties may need to restructure or unwind it. Spot delivery is regulated in some states and carries elevated compliance risk.

See also Conditional Approval, Contract in Transit, Mail-Away Deal, Rehash

A nine-digit number issued by the Social Security Administration and commonly used as one identifier in consumer credit applications and credit reporting.

See also EIN — Employer Identification Number, Identity Verification, ITIN — Individual Taxpayer Identification Number, PII — Personally Identifiable Information, Tax Identification Number (TIN)

A document, verification, action, or other condition that must be satisfied before a lender will complete approval or funding.

See also Approval, Conditional Approval, Deal Jacket, Dealer Portal, Document Management, Employment Verification (VOE), Funding, Funding Packet, Income Verification, OCR — Optical Character Recognition, Proof of Insurance, Verification

A general classification for applicants presenting higher estimated credit risk, typically associated with limited or adverse credit history. As with prime, the term is a market convention rather than a standardized definition, and thresholds vary by lender.

See also Credit Risk, Credit Score, Prime, Risk-Based Pricing, Risk Tier

An account holding funds that have been received but not yet applied to a loan, such as a partial payment that does not satisfy a full scheduled installment.

See also Curtailment, Loan Servicing, Past Due, Payment Waterfall

A number used by the IRS for tax administration. Common forms include an SSN, EIN, and ITIN.

See also EIN — Employer Identification Number, ITIN — Individual Taxpayer Identification Number, SSN — Social Security Number

The length of time over which a loan or credit obligation is scheduled to be repaid.

See also Amortization, Interest Rate, Maturity Date, Open-End and Closed-End Credit, Payment Schedule

A credit file containing relatively few credit accounts or limited credit history, which may give a lender or scoring model less information with which to evaluate credit risk.

See also Credit File, Credit Score, Manual Underwriting, Tradeline

A federal consumer protection law requiring standardized disclosures about the cost and terms of certain consumer credit transactions. Regulation Z implements TILA.

See also Amount Financed, Annual Percentage Rate (APR), Finance Charge, Regulation Z / Reg Z, Total of Payments

A legal document or electronic record establishing ownership of a vehicle or other titled property.

See also Certificate of Title, Lien, Lien Perfection, Lienholder

A determination that damaged or stolen collateral will not be repaired, typically made by an insurer. A total loss ends the collateral's value to the lender and may leave a remaining balance that GAP is intended to address.

See also Collateral Protection Insurance (CPI), Deficiency Balance, GAP — Guaranteed Asset Protection, GAP Waiver, Proof of Insurance, Vehicle History Report

A Regulation Z disclosure representing the total amount a consumer will have paid after making all scheduled payments as disclosed.

See also Amount Financed, Annual Percentage Rate (APR), Finance Charge, Payment Amount, Payment Schedule, Regulation Z / Reg Z, TILA — Truth in Lending Act

A vehicle or other asset transferred to a seller as part of a new purchase transaction.

See also Down Payment, Equity, Negative Equity, Payoff on Trade, Trade-In Allowance

The value the dealer assigns to a trade-in vehicle as part of the transaction.

See also Cash Price, Down Payment, Equity, Front-End Gross, Negative Equity, Payoff on Trade, Trade-In

A credit account appearing on a consumer's credit report. Each reported loan, credit card, or similar account is generally represented as a separate tradeline.

See also Credit File, Credit Report, Data Furnisher, Derogatory Credit, Thin Credit File

An application a lender declines. In indirect lending, turndowns from one lender are often routed to other participating lenders through an aggregator or dealer's lender waterfall.

See also Adverse Action, Decline, Pull-Through Rate, Waterfall (Lender Routing)

A filing used to give public notice of a security interest in certain collateral, establishing priority against other creditors. Vehicle liens are typically perfected through title notation rather than a UCC-1.

See also Collateral, Lien, Lien Perfection, PMSI — Purchase Money Security Interest

A person responsible for evaluating credit applications and determining whether the transaction satisfies the lender's credit and risk requirements.

See also Exception, Lending Authority, Manual Underwriting, Queue, Underwriting

The process of evaluating an applicant, transaction, collateral, credit history, income, ability to repay, fraud risk, and other relevant factors to determine whether and on what terms credit should be extended.

See also Ability to Repay, Adjudication, Automated Decisioning, Credit Policy, Debt-to-Income Ratio (DTI), Decisioning, Loan Origination, Manual Underwriting, Underwriter

Interest included in a precomputed balance that has not yet accrued. On early payoff, unearned interest is generally rebated under a method specified by contract and applicable law.

See also Interest, Payoff, Precomputed Interest, Prepayment Penalty, Rule of 78s, Simple Interest

A loan that is not secured by specific collateral.

See also Collateral, Credit Risk, Secured Loan

The configuration governing what a given user may view, edit, approve, or perform within a system. Roles support both operational control over lending authority and safeguarding of consumer information.

See also Dual Control, GLBA — Gramm-Leach-Bliley Act, Lending Authority, PII — Personally Identifiable Information, Queue, Single Sign-On, SOC 2

The charging of interest above a legally permitted maximum. Applicable rate caps vary by state, product, lender type, and loan amount.

See also Annual Percentage Rate (APR), Credit Policy, Interest Rate, Risk-Based Pricing

The industry publication or data service a lender designates for determining collateral value. Lenders specify which source, edition, and value type apply within their credit policy.

See also Advance Rate, Book Value, Loan-to-Value Ratio (LTV), Mileage, Mileage Adjustment, Residual Value, Vehicle History Report, Vehicle Options, Year, Make, Model

A family of consumer credit scoring models developed by VantageScore Solutions. VantageScore models use information from consumer credit files maintained by Equifax, Experian, and TransUnion to estimate credit risk.

See also Bureau Score, Credit Report, Credit Score, FICO® Score

A report compiling recorded events associated with a specific vehicle, such as title history, reported accidents, prior use, and odometer records. Lenders may use it to identify branded titles or other conditions affecting collateral value.

See also Book Value, Total Loss, Valuation Source, VIN — Vehicle Identification Number

Installed equipment and features that may affect the configuration and market or book value of a vehicle.

See also Book Value, Mileage Adjustment, MSRP — Manufacturer's Suggested Retail Price, Power Booking, Valuation Source, VIN — Vehicle Identification Number, Year, Make, Model

The process of confirming information provided in a credit application or transaction. Verification may involve identity, income, employment, residence, phone, insurance, collateral, documents, or other information.

See also Conditional Approval, Employment Verification (VOE), Fraud Detection, Identity Verification, Income Verification, OFAC — Office of Foreign Assets Control, Proof of Insurance, Stipulation / Stip

A standardized unique identifier assigned to a motor vehicle and used to identify attributes such as manufacturer, model, model year, and vehicle configuration.

See also Book Value, Vehicle History Report, Vehicle Options, Year, Make, Model

An optional contract covering certain vehicle repair costs or services during a specified period and subject to stated exclusions, limitations, and conditions.

See also Add-On Products, Finance and Insurance (F&I), Service Contract, Warranty

A promise covering specified defects or repairs for a defined period. Because warranties and vehicle service contracts can have different legal characteristics, the terms should not automatically be treated as interchangeable.

See also Add-On Products, Service Contract, VSC — Vehicle Service Contract

The defined order in which an application is submitted to lenders, so that a turndown or unacceptable offer from one lender routes the application to the next. Distinct from a payment waterfall in servicing.

See also Application Aggregator, Indirect Lending, Pull-Through Rate, Queue, Turndown

A defined sequence of tasks, decisions, approvals, verifications, communications, and system actions used to move an application or loan through the lending process.

See also Business Rules Engine, Loan Origination System (LOS), Queue, Workflow Automation

The use of software to automatically route work, perform tasks, trigger communications, apply rules, request documents, or advance an application based on predefined conditions.

See also Automated Decisioning, Business Rules Engine, Loan Origination System (LOS), Queue, Workflow

An arrangement negotiated with a borrower experiencing difficulty, intended to resolve a delinquent or defaulted obligation without proceeding directly to repossession or charge-off.

See also Charge-Off, Default, Deferment, Forbearance, Loan Modification

The removal of a balance from a lender's books as uncollectible. Write-off and charge-off are often used interchangeably, though some institutions distinguish between the accounting entry and the collections status.

See also Charge-Off, Deficiency Balance, Loss Given Default, Portfolio

The core descriptive attributes identifying a vehicle, used together with options and mileage to determine value and program eligibility.

See also Book Value, Valuation Source, VIN — Vehicle Identification Number, Vehicle Options

The return a lender earns on a loan or portfolio, expressed as a rate. Yield may differ from the contract rate once discounts, participation, fees, and prepayments are considered.

See also Buy Rate, Interest Rate, Portfolio, Risk-Based Pricing

A promotional offer carrying no interest charge, typically manufacturer-subsidized and limited to qualifying applicants, vehicles, and terms. Accepting such an offer may require forgoing an alternative cash rebate.

See also Annual Percentage Rate (APR), Cash Price, Finance Charge, Interest Rate