Credit
Megan Huffman & Kayln Ellenburg
What is Credit?
Credit can be a good tool, but you need to use it correctly. It is money that you borrow, but will eventually have to pay back.
Credit
Borrowing money to pay for something now while promising to pay it back later.
Annual Percentage Rate (APR)
The annual cost of credit expressed as a percentage of the amount borrowed.
Collateral
Property, such as a house or a car, that a borrower pledges as security for a loan.
Lender & Borrower
The lender is the person who loans money to you.
The borrower is the person who receives the money and must pay it back.
Interest
The cost to borrow the money.
Credit Rating
An evaluation of the likelihood of a borrower to default on, or be unable to pay back a loan.
Sources of Credit
Places that offer credit include: banks, credit unions, and finance companies. Stores such as Belk, Best Buy, or Ford can offer credit cards for use in their stores only.