Borrowing more money and increasing the overall size of your loan or mortgage. You can use the money for a variety of purchases not necessarily connected to your property or initial purchase.

An APR is a percentage rate which is charged on borrowing each year. It allows you to work out the cost of borrowing money and also helps you to compare the cost of different borrowing options. The majority of credit agreements will show the cost of borrowing as an APR.

Arrears occur when you fail to make a repayment by a scheduled date set out in a credit agreement. For example if you made a loan repayment late, the account would fall into arrears as you would be behind on your payments.

It is worthwhile knowing that arrears can affect your credit score as they show as a missed/late payment, and some lenders can charge you additional fees if you’re in arrears.

Bankruptcy is a way of ending your liability for debts that you cannot pay.  Any assets that you own may be sold to raise money to pay to your creditors. This can have serious consequences and should be research fully before considering this as an option.

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A financial plan designed to track and forecast monthly expenditure. It helps identify how much money you are spending compared to how much you earn.  The plan will log all essential outgoings and then show you how much disposable income you should have left. To see how much money you have to spend each month why not try out the money saving expert's handy budget planner here.

A CCJ is a court order and is registered against a person to instruct them to repay a debt. CCJ’s can negatively affect your credit score and ability to obtain credit for up to 6 years. 

A credit agreement is a legally binding contract made between a borrower and a lender. It outlines the rules of the lending, which include repayment terms, fees and interest rates. You will be given a credit agreement for loans, credit cards, and many other credit arrangements.

Lenders can check your credit file when they are assessing an application for credit, or sometimes they can check your file before making you an offer to entice you to apply for credit. The results show current and historic debts, credit and highlight if payments have been made late or not at all.

Credit reference agencies are independent organisations which securely hold financial data about individuals. They collect information about a persons credit history and make it available to banks, building societies, credit unions and other financial organisations. Organisations will access a persons credit file through a credit reference agency when they apply for credit, which helps them to make a decision.

Credit Reference Agencies gather information about your credit history and put this information into a credit report. Its then calculated to create a credit score for you based on the information within your credit report. Lenders will ask credit reference agencies for information about you before accepting or declining an application for a loan.

Credit unions were created to help members save and use these pooled savings to lend to members who needed to borrow. The idea is that as membership and savings grow, more members can be helped. Surplus profit made from this borrowing is then shared amongst members each year in the form of an annual dividend, this is because credit unions are not for profit. Saving continues to be an important part of credit union membership as it helps members build financial stability alongside helping others to borrow. To find out more, click here.

A credit score helps lenders to decide whether a person is likely to meet the financial commitment to them.  It’s important to understand that your score is not just focussed on repayments, it also includes factors such as whether you are using credit responsibly.

The Data Protection Act controls how personal/customer information is used by organisations or by government bodies.

A Debt Relief Order (DRO) is a formal insolvency solution for dealing with your debt.

The term delinquency commonly refers to a situation where a borrower is late or overdue on a payment, such as a mortgage repayment, a car loan, or a credit card account

Direct Debit is an instruction from you to your bank or building society that authorises the organisation you want to pay to collect the sum amounts from your account, this is arranged by giving notice of the amounts and dates of collection.

When money is deposited with a credit union, you become a member. The credit union may pay dividends back to you on the amount you have saved, which is produced from the surplus made by the credit union in which they distrubute shares with its members.

The Financial Conduct Authority is a financial regulatory body in the United Kingdom, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry.

The FOS is an regulator in the United Kingdom. It was established in 2000, and given statutory powers in 2001 by the Financial Services and Markets Act 2000, to help settle disputes between consumers and UK-based businesses providing financial services, such as banks, building societies, insurance companies, investment firms, financial advisers and finance companies.

The FSCS is the UK’s statutory Deposit insurance and investors compensation scheme for customers of authorised financial services firms. This means that FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. Protection is covered up to £85,000.

A guarantor loan is a type of unsecured loan that needs the borrower to have a second person to act as a guarantor for the loan. A guarantor loan can be a suitable option if you’re struggling to get approved for a personal loan because you’re suffering from ‘bad credit’. The guarantor needs to agree to repay the loan if the borrower becomes unable to do so.

Interest is what a person is charged for borrowing money. It’s expressed as a percentage.

The interest rate is the amount charged (expressed as a percentage) by a lender to a borrower for the use of a loan. Interest rates are typically worked out for a loan on an annual basis, known as the annual percentage rate (APR).

An IVA is an agreement with your creditors to pay all or part of your debts. It means that you will agree to make regular payments to an insolvency practitioner, who will divide this money between your creditors. An IVA can help give a person more control of your assets than declaring a bankruptcy.

Open Banking allows you to share certain financial information that only you and your bank can see, such as your balance and transaction history, with other financial providers or services of your choosing. The idea is to make it easier for other organisations to use your data to personalise products or make suggestions on areas you can save. 

Unsecured loans are loans that are not backed by collateral and typically have higher interest rates than secured loans.

The PRA is a United Kingdom financial services regulatory body, formed as one of the successors to the Financial Services Authority (FCA). The authority is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers, and major investment firms.

A secure loan is supported by collateral, that the lender can possess and sell if the loan is not repaid.

A standing order is an instruction that you give to your bank to pay a specific amount at regular times, such as weekly, monthly, quarterly, or yearly.

A debt management plan (DMP) is an arrangement that allows you to condense several of your credit card balances into a single monthly payment. The objective of a debt management plan is to meet your financial obligations by completely paying off your outstanding credit card debt.