Most references are for notes or financial promises to pay (commercial paper) being held by 3rd parties
A holder in due course (HDC) is a person who takes a negotiable instrument, such as a promissory note, for value without knowledge of any apparent defect in the instrument nor any notice of dishonor. (Black's Law Dictionary 2nd Pocket ed. 2001 pg. 322). Status as a "holder in due course" is an affirmative defense against all legal claims the debtor may have against the original creditor. In other words, a "holder in due course" does not become responsible for the original creditor's alleged misdeeds in the original credit transaction.
A person typically becomes a "holder in due course" through the following steps: (1) an original creditor loans money to a person in return for a promise to repay that money with interest; (2) The original creditor then sells the credit contract (the right to receive repayment of the loan) to a "new creditor" (such as a bank); and (3) the new creditor takes the debt without any knowledge of (a) a defect in the note, (b) any misrepresentations made by the original creditor to the debtor, or (c) any other act that would give the debtor a legal claim against the original creditor.