Credit & Debt
Borrowing, credit scores, and paying it off.
Credit shapes the rates you're offered and the doors that open to you; debt decides how much of your paycheck you keep. These terms make borrowing, credit scores, and payoff strategies clear.
All Credit & Debt terms(85)
- Account AgeHow long your credit accounts have been open, where a longer average history generally strengthens your credit score.
- AmortizationThe process of paying off a loan through scheduled payments that cover both interest and principal until the balance reaches zero.
- Annual FeeA yearly charge some credit cards impose for the privilege of holding the card and its rewards or benefits.
- Auto LoanAn installment loan used to buy a vehicle, secured by the car, which the lender can repossess if you default.
- Available CreditThe portion of your credit limit you have not used yet, equal to your limit minus your current balance.
- Balance TransferMoving debt from one credit card to another, often to take advantage of a lower promotional interest rate.
- Balance Transfer FeeA charge, usually a percentage of the amount moved, that a card issuer adds when you transfer a balance to it.
- BankruptcyA legal process that discharges or restructures debts you cannot repay, offering relief but leaving a lasting mark on your credit.
- Billing CycleThe recurring period, usually about a month, over which your credit card tracks purchases before issuing a statement.
- Cash Advance APRThe typically higher interest rate charged when you use a credit card to withdraw cash, often with no grace period.
- Cash Advance FeeA charge added when you borrow cash against your credit card, on top of the higher interest that starts immediately.
- Charge-OffWhen a lender writes off a debt as unlikely to be repaid, usually after months of missed payments, while you still owe it.
- CollateralAn asset you pledge to back a loan, giving the lender the right to seize it if you do not repay as agreed.
- Collection AgencyA company that recovers overdue debts on behalf of creditors or buys the debt outright and pursues you for payment.
- CollectionsThe process of a creditor or a hired agency pursuing an unpaid debt, which appears as a negative mark on your credit report.
- CosignerA person who agrees to repay your loan if you cannot, using their credit to help you qualify and sharing full liability.
- Credit ApplicationThe request you submit to a lender for a card or loan, which usually triggers a hard inquiry on your credit report.
- Credit BureauA company that collects and sells your credit history; the three major ones are Equifax, Experian, and TransUnion.
- Credit CounselingGuidance from a nonprofit advisor who reviews your finances and can help set up a plan to manage or repay debt.
- Credit FreezeA free lock you place on your credit report that blocks new lenders from viewing it, helping prevent identity theft.
- Credit LimitThe maximum amount a lender lets you borrow on a credit card or line of credit before charges get declined.
- Credit MixThe variety of credit types you hold, such as cards, auto loans, and mortgages, which slightly influences your score.
- Credit ReportA detailed record of your borrowing history, including accounts, balances, and payment behavior, kept by the credit bureaus.
- Credit ScoreA number that sums up how you've handled borrowing, shaping the rates you're offered.
- Credit UtilizationThe share of your available credit that you are currently using, calculated by dividing your balances by your credit limits.
- Credit-Builder LoanA small loan where the borrowed money is held until you finish paying, helping you build a positive payment history.
- Debt AvalancheA payoff strategy that targets the highest-interest debt first while paying minimums on the rest to reduce total interest.
- Debt ConsolidationCombining several debts into a single new loan or payment, often to secure a lower rate or simplify what you owe.
- Debt Management PlanA structured repayment arrangement, usually set up through a credit counselor, that consolidates payments and may lower rates.
- Debt SettlementNegotiating with a creditor to accept less than the full amount owed to resolve a debt, often for accounts already in default.
- Debt SnowballA payoff strategy that clears the smallest balance first for quick wins, then rolls those payments into the next debt.
- Debt ValidationYour right to request written proof that a debt is yours and accurate before a collector can continue pursuing it.
- Debt-to-Income Ratio (DTI)The share of your monthly income that goes to debt payments — a key number lenders check.
- DefaultThe failure to repay a debt as agreed after an extended period, which can lead to collections, legal action, or repossession.
- DefermentA temporary pause on loan payments, often for school or hardship, during which interest may or may not keep building.
- Deferred InterestA promotional offer where interest is waived only if you pay the full balance by the deadline, then charged retroactively if you don't.
- Deficiency BalanceThe amount you still owe after collateral is repossessed and sold for less than your remaining loan balance.
- DelinquencyThe status of an account when payments are past due, which worsens the longer the debt goes unpaid.
- Extra PaymentA payment beyond your required amount that goes toward principal, cutting the total interest and time to pay off a loan.
- Fair Debt Collection Practices ActA federal law that limits how debt collectors can contact you and bars abusive, deceptive, or unfair collection tactics.
- Federal Student LoanAn education loan issued by the U.S. government that offers fixed rates and flexible repayment and hardship options.
- FICO ScoreThe most widely used credit score model, ranging from 300 to 850, that lenders check to gauge how risky you are to lend to.
- Finance ChargeThe total cost of borrowing on an account for a period, including interest and any applicable fees.
- Fixed Interest RateA rate that stays the same for the life of a loan, so your payment amount does not change over time.
- ForbearanceA temporary pause or reduction of loan payments granted for hardship, during which interest usually continues to accrue.
- Fraud AlertA notice added to your credit file that tells lenders to verify your identity before opening new accounts in your name.
- Hard InquiryA credit check triggered when you apply for new credit, which can slightly lower your score and stays on your report for two years.
- HELOC (Home Equity Line of Credit)A revolving credit line secured by your home's equity that lets you borrow, repay, and borrow again up to a limit.
- Identity TheftWhen someone uses your personal information without permission to open accounts or borrow money in your name.
- Income-Driven RepaymentA federal student loan plan that ties your monthly payment to your income and family size, adjusting as they change.
- Installment LoanA loan repaid in fixed, scheduled payments over a set term, such as an auto loan, student loan, or personal loan.
- Interest CapitalizationWhen unpaid interest gets added to your loan principal, so future interest is charged on a larger balance.
- Interest RateThe percentage a lender charges you to borrow money, or pays you to keep money deposited, over a set period.
- Introductory APRA temporary low or zero interest rate offered on a new card for a limited time before the standard rate takes over.
- Late PaymentA payment made after its due date, which can trigger fees, higher rates, and damage to your credit history.
- LienA legal claim a lender places on your property as security for a debt, which can block a sale until the debt is paid.
- Line of CreditA flexible borrowing arrangement that lets you draw funds up to a limit as needed and pay interest only on what you use.
- Loan ForgivenessA program that cancels some or all of a remaining loan balance after you meet certain conditions, common with federal student loans.
- Loan TermThe length of time you have to repay a loan in full, which affects both your monthly payment and total interest paid.
- Minimum PaymentThe smallest amount you can pay on a credit card each month to stay current, though paying only this keeps you in debt longer.
- Origination FeeAn upfront charge some lenders deduct from your loan to cover processing, reducing the amount you actually receive.
- Over-Limit FeeA charge that may apply when a transaction pushes your credit card balance above its assigned limit.
- Payday LoanA small, short-term loan with very high fees meant to be repaid by your next paycheck, often trapping borrowers in repeat debt.
- Payment HistoryThe record of whether you paid your bills on time, which is the single biggest factor in most credit score calculations.
- Penalty APRA higher interest rate a card issuer may apply after you miss payments, increasing the cost of any balance you carry.
- Personal LoanA lump-sum loan, usually unsecured, repaid in fixed installments and used for anything from debt consolidation to big purchases.
- Predatory LendingUnfair or deceptive loan practices that trap borrowers with excessive fees, high rates, or terms designed to cause default.
- PrequalificationA preliminary estimate of what a lender might offer you, based on a soft credit check that does not affect your score.
- Prime RateThe base interest rate banks charge their most creditworthy customers, used as a starting point for many consumer loan rates.
- PrincipalThe original amount of money you borrow, separate from the interest and fees that get added on top of it.
- Private Student LoanAn education loan from a bank or lender, usually with terms based on your credit and fewer hardship protections than federal loans.
- Purchase APRThe interest rate applied to everyday purchases on a credit card when you carry a balance past the grace period.
- RefinancingReplacing an existing loan with a new one, usually to get a lower rate, a different term, or a smaller monthly payment.
- RepossessionWhen a lender takes back collateral, such as a car, after you default on a secured loan tied to that property.
- Revolving CreditA type of borrowing where you can repeatedly use and repay up to a limit, like a credit card, without a fixed payoff date.
- Secured Credit CardA card backed by a refundable cash deposit that sets your limit, designed to help build or rebuild credit history.
- Secured DebtBorrowing backed by collateral, like a house or car, that the lender can take if you fail to repay the loan.
- Soft InquiryA credit check that does not affect your score, such as checking your own report or a prescreened offer.
- Statement BalanceThe total amount you owed at the end of a billing cycle, which you can pay in full to avoid interest charges.
- Statute of LimitationsThe legal time limit during which a creditor can sue you to collect a debt, after which the debt becomes time-barred.
- Student LoanMoney borrowed to pay for education, offered by the government or private lenders, repaid with interest after school.
- Title LoanA short-term loan secured by your vehicle's title with steep costs, letting the lender take the car if you do not repay.
- Unsecured DebtBorrowing not tied to any collateral, such as most credit cards and personal loans, relying on your promise to repay.
- VantageScoreA credit scoring model created by the three bureaus as an alternative to FICO, also ranging from 300 to 850.
- Variable Interest RateA rate that can rise or fall over time based on a benchmark index, which changes how much you owe each month.