Lesson 7: The Credit Conundrum
Terms in this set (20)
annual percentage rate
"APR"; the total of what a loan costs the borrower each year, expressed as a percentage of the loan amount.
money that can be used to produce or acquire things of value.
the ability to obtain goods or services immediately by promising to pay for them later.
the person or business who provides money for a loan.
activities by a debt collection agency to recover amounts owed.
debt incurred for the purchase of goods or services primarily for personal or household purposes which goods or services lose value over time.
theory that the consumption of goods and services in large quantities is beneficial to a country's economy.
an independent company that records and shares information about the creditworthiness of consumers who want to borrow money.
information on a person's bill paying history, total debts and bankruptcy history used by a potential creditor to evaluate a loan applicant's creditworthiness.
loans made via online platforms that connect people who need money with investors who have money to lend; also called peer-to-peer lending.
a sum of borrowed money which must be paid back.
debt to income (DTI) ratio
the amount of debt a person has compared to their overall income.
FICO® credit score
a measure of creditworthiness based on a data analysis method invented by the Fair Isaac Corporation (FICO).
to obtain a loan for a business purchase or personal purchase.
government guaranteed debt
a loan that will be repaid by the government if the debtor fails to repay it.
a fee paid for the use of someone else's money, expressed as a percentage rate.
debt incurred as an investment in things that build wealth or increase in value over time.
the financial ability to buy products and services.
the amount of loan remaining unpaid, not including interest and other charges.
an order from a court or a government agency requiring an employer to deduct money from an employee's paycheck to satisfy a debt.