Ch 4 Vocab - Credit & Debt

A legal claim against (or right to own) an asset until the debt (loan) is repaid.

• Lien

• Interest

• Debt

• Collateral

The loss of value of an asset over time.

• Depreciation

• Equity

• Amortization

• Interest

An asset that increases in value over time.

• Revolving credit

• Negative equity

• Appreciating asset

• Interest

A company that collects credit rating information and makes it available to creditors is known as what?

• Predatory lender

• Credit bureau

• Credit score

• Installment credit

What is the term for failure to repay a loan on time?

• Default

• Interest

• Term

• Collateral

What is a statistical number used to represent a consumer's creditworthiness?

• Credit score

• Principal

• Installment credit

• Credit bureau

The increase in value of a home over time; the difference between the amount owed and what the home could be sold for.

• debt

• principal

• equity

• depreciating asset

An asset that loses value over time, such as a car that's worth less every year.

• equity

• depreciating asset

• negative equity

• interest

The amount of time, in months, that you'll be making payments.

• collateral

• interest

• principal

• term

Something owned (that has value) offered as security on a debt; if the debt is not repaid as agreed, the item is forfeited to the lender.

• collateral

• default

• lien

• interest