Credit Application

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DEFINITION of 'Credit Application'

A request for an extension of credit, either orally or in written form. The request must follow the lender's extension request procedures in order to be valid. The application must legally contain all pertinent information relating to the cost of the credit, including the annual percentage yield (APY) and all associated fees. Regulation Z of the Federal Reserve governs the credit application process.

BREAKING DOWN 'Credit Application'

A valid credit application will provide the amount and type of credit requested, the applicant's credit score and report and the means of security for the loan. Regulation Z also protects consumers by providing rights to credit card users, such as giving borrowers written disclosure and providing guidelines for acceptable credit advertisements.

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RELATED FAQS
  1. How is my credit score calculated?

    The credit score, commonly referred to as a FICO score, is a proprietary tool created by the Fair Isaac Corporation. This ... Read Full Answer >>
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    Consumer debt instruments allow people to borrow money at specific interest rates. In recent years, the credit industry has ... Read Full Answer >>
  3. Why would someone change their Social Security number?

    In general, the Social Security Administration, or SSA, does not encourage citizens to change their Social Security numbers, ... Read Full Answer >>
  4. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
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    Creditors that allow purchases to be made through financing often require property to be pledged against a credit account; ... Read Full Answer >>
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