| A | B |
|---|
| net worth | the difference between the total assets and total liabilities of an individual |
| balance | the amount owed on a loan or credit card or the amount in a savings or investment account |
| debt service | the periodic payment of the principal and interest on a loan |
| debt | money that is owed; a liability |
| asset | something owned that has value |
| budget | itemized summary of probable income and expenses for a given period of time |
| loan | money lent at interest |
| balance sheet | financial statement showing assets, liabilities and net worth |
| Fair Credit Reporting Act | This law requires lenders to identify the credit bureau that provides them with the information used to make their lending decisions. |
| Equal Credit Opportunity Act | This law made it illegal to refuse credit on the basis of race, color, religion, national origin, gender, marital status, or age. |
| Fair Debt Collections Practices | This law prohibits harassing or abusive conduct such as threatening phone calls or deceptive means to get information |
| principal | the amount of money borrowed |
| grace period | the time between the billing date and the due date where no interest is charged |
| balance | amount owd on a loan or credit card |
| debt consolidation | A program where several small debts are combined into one larger debt with the purpose of lowering the overall monthly payment. |
| finance charge | the total cost a borrower must pay for a loan, including interest and fees |
| credit | the ability to borrow money in return for the promise of future repayment |
| creditworthiness | A measure of your predicted likelihood to repay a loan |
| credit bureau | collects information about a consumer's credit history and sells it to lenders |
| secured loans | loans backed by collateral |
| credit limit | The maximum amount you are able to charge up to on a credit account |
| Truth in Lending | requires all banks to calculate credit costs in the same way |
| character | Your record of stability, reputation, and history of handling credit |
| credit history | A record of your past borrowing and repayment history |
| capacity | A measure of your financial ability to repay a loan |
| capital | The value of what you own including your savings, investments, and property |
| asset | Something you own of value |
| revolving credit | allow you to carry a balance from one month to the next |
| balance sheet | financial statement showing a "snapshot" of the assest, liabilities and net worth of an individual or organization |
| Annual Percentage Rate (APR) | cost of credit expressed as a yearly percentage |
| cosigner | another person who signs your loan and assumes equal responsibility for it |
| liability | money an individual or organization owes |
| term loan | a loan for a predetermined amount that requires specified payments at regular intervals over the life of the loan |
| bankruptcy | legal proceeding declaring that an individual is unable to pay debts |
| default | failure to repay a loan or otherwise meet the terms of your credit agreement |
| credit score | number generated by a statistical model that objectively prdicts the likelihood that a debt will be repaid on time |
| credit card | plastic card from financial services company that allows cardholders to buy goods and services on credit |
| promissory note | written promise on a financial instrument to repay the money plus interest |
