Glossary
Cancellation rights mean that if a dealer does not tell you information they are required to by law, you can cancel your purchase agreement within 90 days from when you signed.
To co-sign is to sign a legal agreement together with another person for a loan or other debt. When you do this you are jointly responsible for paying the debt. For example, if you co-sign a lease, you are responsible for paying all of the rent, even if the other person doesn’t pay their part.
A code of ethics is a set of rules that say what members of an organization or profession can do, and how they are supposed to behave and run their business. For example, a non-profit credit counsellor will protect a client’s privacy and not share information about a client without getting permission.
Collateral is an asset of yours that you use as security for a loan. This means that if you do not pay back the money you borrowed, your creditor can take the collateral as payment instead. For example, a house can be collateral for a mortgage, and a car can be collateral for a car loan.
A collection agency is a business that tries to collect unpaid debts for creditors. If you aren’t paying back money that you owe, the person or business you owe the money to may hire a collection agency to try to get you to pay the money back.
A consolidation loan is when you combine most or all of your debts into a single, new loan. Consolidation loans almost always have a lower monthly payment, lower interest rate, or both, than credit cards or payday loans. Banks and credit unions usually offer these loans.
A consumer proposal is a legal process to help you get out of debt. A Licensed Insolvency Trustee helps you make a plan to give to your unsecured creditors.
If a creditor accepts your plan, one or both of the following happens:
- you pay only part of what you owe them
- you have more time to pay them back
A credit reporting agency is a business that keeps a record of your credit history. It also calculates your credit score. The two main credit reporting agencies in Canada are Equifax and TransUnion.
A cooling off period is the amount of time you have to change your mind to cancel a contract without giving a reason and without penalty. Not all contracts have cooling-off periods, or the same cooling off period.
Credit is getting money, goods, or services now in exchange for your promise to pay them back later. Rent payments, phone bills, utility bills, loans, and money you borrow on a credit card or a line of credit, are common types of credit.