| A | B |
|---|
| Credit | Agreement between two parties in which one party lends money or provides goods or services to another party with the understanding that payment will be made at a later date. |
| Creditor | Party extending credit; also called the lender. |
| Debtor | Party receiving credit; also called the borrower. |
| Consumer Credit | Credit granted to individual consumers by a retail business |
| Business credit | Credit granted to a business by a financial institution or another company. |
| Trade credit | Line of credit granted from one business to another for a short period of time to purchase goods and services. |
| Closed-end credit | Loan for a specific amount that must be repaid with interest by a specified date or according to a specified schedule. |
| Secured credit | Credit loans that require collateral. |
| Installment loan | Loan for a specific amount of money that is repaid with interest in regular installments. |
| Priincipal | Amount of money borrowed. |
| Finance Charge | Total amount paid by a borrower to a lender for the use of credit. |
| Open-end credit | Agreement that allows the borrower to use a specific amount of credit over a period of time. |
| Unsecured Credit | Credit granted based on a signed credit agreement alone; also referred to as a line of credit or revolving line of credit. |
| Annual Percentage Rate (APR) | Annual cost of credit charged by a lender. |
| Proprietary Credit Card | A credit card that can be used only in the stores of the company that issued it. |
| Credit Policy | Written set of guidelines used by an organization to determine how many and which customers will be approved for credit. |
| Three Cs of Credit | Criteria used to evaluate the creditworthiness of consumer credit applicants, including character, capacity, and capital. |
| Credit Report | Record of credit history and financial behavior for a business or individual. |
| Credit Bureau | Private firm that maintains consumer credit data and provides credit information to businesses for a fee. |
| Credit Score | Numerical measure of a loan applicant's creditworthiness at a particular point in time; also known as the FICO score. |
| Credit Risk | Potential of credit not being repaid. |
| Accounts Receivable | List of the individuals or businesses that owe money to a company. |
| Accounts Receivable Aging Report | Report that shows when accounts receivables are due, as well as the length of time accounts have been outstanding. |
| Collection Agency | Company that collects past-due bills for a fee. |
| Five Cs of Banking | Criteria lenders use to evaluate the creditworthiness of businesses, including cash flow, capacity, capital, collateral, and conditions. |
