Vocabulary Words

A measure of how likely a person is to repay borrowed money, often based on credit history and financial behavior. Fill in the blank: __________

• credit score

• interest rate

• loan term

• debt ratio

A financial metric that compares a person’s total monthly debt payments to their monthly income, used by lenders to assess credit risk. Fill in the blank: __________

• Debt-to-Income Ratio

• Credit Score

• Net Worth

• Interest Rate

A type of credit score ranging from 300 to 850 that lenders use to determine loan eligibility and interest rates. Fill in the blank: __________

• credit score

• credit limit

• credit report

• credit history

A loan backed by collateral, such as a car or house, which the lender can take if the borrower fails to repay.

• Secured Loan

• Unsecured Loan

• Personal Loan

• Payday Loan

A loan that is not backed by collateral and is granted based on the borrower’s credit history and income.

• Unsecured Loan

• Secured Loan

• Mortgage Loan

• Auto Loan

An agency that collects and maintains consumer credit information, such as Equifax, Experian, and TransUnion.

• Credit Bureau

• Bank

• Insurance Company

• Investment Firm

Failure to repay a loan according to the agreed-upon terms, which can lead to legal action and damage to credit scores.

• Default

• Interest

• Collateral

• Amortization

Fixed-income investments where investors lend money to a government or corporation in exchange for periodic interest payments and repayment at maturity. _______

• What are fixed-income investments?

• What are stocks?

• What are mutual funds?

• What are real estate investments?

A payment made by a company to its shareholders, usually in the form of cash or additional shares. _______

• dividend

• interest

• capital gain

• retained earnings

The percentage of available credit a borrower is using, which impacts their credit score.

• Credit utilization ratio

• Debt-to-income ratio

• Credit limit

• Payment history