PBF 5.01

Created by fgc013 

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21 terms

Credit

the privilege of using someone else's money for a period of time

Debtor

anyone who buys on credit or receives a loan

Creditor

the one who sells on credit or makes a loan

Charge account

a contract between the firm offering the account (credit) and the consumer (debtor)

regular account

required the buyer to make full payment within a stared period

budget account

required the customer make payments of a fixed amount over several months

revolving account

allows the customer to make charges at any time and only part of the debt must be paid each month

installment credit

a contact issued by the seller that requires intermittent payments at specified times such as bi-weekly or monthly

promissory note

a written promise to repay based on a debtor's excellent credit history

collateral

property that os offered to the lender if the debtor does not make payments

credit rating

a person's reputation for paying bills on time

principal

the original amount of the loan

maturity date

when a loan must be repaid

annual percentage rate

states the % cost of credit on a yearly basis

Character

refers to your honesty and willingness to pay a debt when it is due

Capacity

refers to a person's ability to pay a debt when it is due

Capital

the value of the borrower's possessions including money and property

Credit application

a form on which you provide information needed by a lender to make a decision about grant ion credit

credit bureau

a company that gathers information on credit reporting agency

credit counselor

discusses and suggests actions to tai to refuse spending and eliminate credit difficulties

bankruptcy

the legal process of reducing or eliminating an amount owed

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