Ramsey Ch 4 Vocab

Front

Money owed to another person or company

Back

Debt

Front

Credit: ability to obtain goods/services before payment, based on trust of future payment.

Back

the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future

Front

Something of value offered as security for a debt; if unpaid, it is forfeited to the lender.

Back

Collateral

Front

Legal claim on an asset until debt is repaid.

Back

Lien

Front

Default

Back

Failure to repay a loan on time.

Front

Installment Credit

Back

A loan for a fixed amount paid back in monthly installments.

Front

Asset that increases in value over time

Back

Appreciating Credit

Front

An asset that loses value over time, like a car.

Back

Depreciating Credit

Front

Increase in home value over time; difference between owed amount and sale price.

Back

Equity

Front

Credit Score

Back

A statistical number representing a consumer's creditworthiness.