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21 terms

PBF 5.01

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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