The Five C's
Your assets and net worth
Capital
The cost of borrowing money
Interest
Type of credit based on promises to pay and NO collateral
Unsecured Credit
A person who signs a loan with you and is equally responsible for paying it back if u cant
Co-Signer
This person or business is to whom you owe money to
Creditor
Your ability to repay a loan based off your income and debt
Capacity
An interest rate that stays the same for the loan's entire life
Fixed Rate
A loan for a specific amount that is paid back in equal amounts monthly
Installment Credit
The legal status of failing to repay a loan according to the terms you signed to
Default
The general term for a person or company that lends money to a borrower
Lender
Your credit history and ability to pay bills on time
Character
Total cost of borrowing money expressed as percentage
A.P.R
Credit that requires an asset as a "backing" to reduce the risk for the lender
Secured Credit
Court ordered process that allows a person or company to be relieved of most of their debts
Bankruptcy
An outside agency hired by a lender to recover money from a borrower who has stopped paying
Collection Agency
External economic factors affecting your ability to repay
Conditions
The original amount of money borrowed NOT including interest
Principal
A flexible borrowing arrangement that allows you to repeatedly access funds up to a set credit limit
Revolving Credit
The legal process by which a lender takes back a home after the borrower fails to make mortgage payments
Foreclosure
The "Big" Three companies : Equifax, Experian, and Transunion, that collects your financial data
Credit Bureau's
An asset you put up that a lender can take if you fail to repay the loan
Collateral
Interest calculated + Initial principle + Accumulated interest Prior
Compound interest
A short-term, a very high interest loan that is meant to be paid back as soon as the borrower gets their next check
Payday Loan
A legal claim or right that must be paid when the property is sold
Lien
A federal entity that is responsible for making sure banks follow fair lending laws
CFPB (Consumer Financial Protection Bureau)