Your Guide to Common Debt Collection Terms
- Creditor — A person or company whom money is owed.
- Original Creditor — The company or organization with whom the debt or account was originally opened.
- Debt Collector — Generally, a person or company that collects debts owed to the creditor.
- Debt Buyer — A company that purchases debts from creditors or other debt owners.
- Consumer — An individual who owes or is alleged to owe a debt, depending on the applicable legal definition.
- Account Balance — The amount shown as owed to the creditor on an account.
- Validation Notice — A notice containing required information about a debt and certain rights a consumer has in connection with the account.
- Dispute — A consumer’s written or oral challenge to a debt or information associated with the debt.
- Original Account Number — An identifying number associated with the consumer’s original account. For privacy and security, communications may display only part of an account number. The debt collector may have a separate account number for the debt being collected.
- Payment Plan/ Payment Arrangement — An arrangement, when available, that allows an account balance to be paid according to an agreed-upon schedule.
- Settlement — An agreement, when offered and accepted, to resolve a debt according to the payment plan.
- Credit Report — A record of an individual’s credit history and certain information reported by creditors and other data furnishers.
- Credit Reporting Agency (Credit Bureau) — A company that collects and maintains consumer credit information. The three major nationwide credit reporting agencies are Equifax, Experian, and TransUnion.
- Statue of Limitations — A law that establishes the amount of time in which certain legal action may be brought regarding a debt. The applicable period can vary based on factors such as state law and type of debt.
- FDCPA (Fair Debt Collection Practices Act) — A federal law that establishes certain consumer protection and rules governing covered debt-collection activities.