Credit Vocabulary

The total amount of money owed lenders or creditors.

• Loan

• Debt

• Credit

• Collateral

Amount of money borrowed.

• Revolving Credit

• Principal

• Installment Credit

• Term

Something of value that a borrower lets the lender claim if a loan is not repaid.

• Loan

• Debt

• Credit

• Collateral

Is a loan that does not have collateral pledged against it.

• Closed-end Credit

• Secured Loan

• Open-end Credit

• Unsecured Loan

The cost to borrow money which has to be paid.

• Revolving Credit

• Interest

• Principal

• Term

Failure to pay back a loan.

• Default

• Interest

• Principal

• Repossession

The amount of time you have to pay the loan back.

• Revolving Credit

• Term

• Installment Credit

• Repossession

A person who agrees to pay a borrower's debt if he or she defaults on the loan.

• Borrower

• Lender

• Joint Applicant

• Co-signer

Define: Credit Card

• The most credit you are allowed to carry.

• The card issuer adds together your balance for each day and then divides it by the number of days in the month.

• A preferred method of debt repayment.

• A type of card, issued by a bank, that allows users to finance a purchase (buy now, pay later).

Define: Credit Score

• A measure of an individual’s credit risk; calculated from a credit report, using a standardized formula.

• A detailed report of an individual’s credit activity and history.

• The most credit you are allowed to carry.

• Interest that is charged to a credit account if the account holder doesn’t pay off the balance in full.