| FICOŽ SCORE |
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Fair Isaac Corporation Score — a measure of the creditworthiness of a consumer. We consider scores above 650 to be “A” credit, scores from 550 to 650 to be “B” credit, and scores below 550 to be “C” credit. |
| DISCOUNT |
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The discount is the price the client pays to have the contract purchased; it is Summit’s fee. It works much like the fee that credit cards charge for the ability to accept payments on their card. Generally speaking, the discount is on a sliding scale based on the term of the contract. |
| RESERVE |
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The reserve is the amount that Summit holds out of each contract to cover potential contract defaults. This reserve, which is placed in a pooled account, is the client's money, and the client will receive a detailed monthly report showing the reserve amount, contract balances remaining on Summit’s books and any delinquencies. At the end of the first year, and every six months thereafter, Summit will review the client's reserve and refunds excess monies. |
| PROCEEDS |
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(Payout To CLIENT) Principal amount financed less discount and reserve, paid to the client on the purchase of a contract. |
| SIGHT DRAFT |
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Summary supplied to the client with his or her payout check, detailing the names of the contracts purchased and itemizing the proceeds, and showing disposition of the non-purchased contracts. |
| OBLIGOR DEFAULT |
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The obligor is the consumer. If the consumer does not make his payments, and Summit determines the contract is uncollectible, the consumer is in default of his or her contract. |
| CLIENT DEFAULT |
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Summit’s client (the business) is in default of its agreement with Summit should it:
- commit fraud
- close its doors and not complete delivery of the service or product to the consumer under terms of a contract purchased by Summit,
- collect payments and not forward them to Summit, or
- commit any other breach of its agreement with Summit.
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| CO-SIGNER |
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A co-signer is any credit worthy individual who signs a contract on behalf of the consumer. It is important that they realize they are responsible for payment in full under the terms of the contract. |
FIRST PAYMENT
DEFAULT |
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In many Summit plans, there is a provision for full replacement of any contract that defaults on the first payment. This means the client must replace the defaulted contract with another similar contract. After the first payment has been made by the consumer, recourse is only to the reserve. |
| FULL RECOURSE |
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On some Summit plans when the credit risk is unusually high, there is a provision for full replacement of all contracts that default. This means the client must replace the defaulted contract with another similar contract. |
| EFT OR AUTO DEBIT |
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The consumer or co-signer makes the payment via an automatic withdrawal from a checking account, savings account or credit card account. |
