Consumer Credit Vocabulary

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Credit Reporting Agency

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Organizations that compile records on users of credit as to how well they repay their debts.

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Personal Loan

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An amount of money you borrow to use for a variety of reasons; these loans can be secured or unsecured depending on if collateral exists.

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FICO Score/Credit Score

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A score that summarizes the probability that a debtor will pay a debt and is a reliable way that creditors judge creditworthiness.

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Debtor

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An organization or person who uses credit.

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Secured Loan

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A loan that requires some type of collateral as a condition of borrowing (e.g., mortgage, business loan, personal loan with collateral, car loan).

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Unsecured Loan

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A loan that does not require collateral; lenders rely on the borrower's creditworthiness.

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Credit Rating

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An assessment of the creditworthiness of a borrower, often expressed as a letter grade.

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Creditor

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An organization or person that extends credit to a debtor.

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Collateral

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An asset that a borrower offers to a lender to secure a loan.

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Creditworthiness

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A measure of a borrower's ability to repay a loan based on their credit history and financial situation.