Chapter 4 Vocabulary

2. the original amount of a loan; the total amount borrowed before interest
3. when the value of an asset falls below what is owed on it
5. a company that collects credit rating information and makes it available to creditors
8. a statistical number used to represent a consumer‘s creditworthiness
10. a lender who uses deceptive, unfair, or fraudulent practices on borrowers who are desperate for cash
11. a loan for a fixed amount of money that‘s paid back in monthly installments
12. money owed to another person or company
13. something owned (that has value) offered as security on a debt; if the debt is not repaid as agreed, the item is forfeited to the lender
15. credit that automatically renews whenever a payment is made to reduce the debt
17. a legal claim against (or right to own) an asset until the debt (loan) is repaid

1. an asset that increases in value over time
4. the increase in value of a home over time; the difference between the amount owed and what the home could be sold for
6. the loss of value of an asset over time
7. an asset that loses value over time, such as a car that’s worth less every year
9. the amount of time, in months, that you’ll be making payments
14. the additional cost a lender charges for borrowing their money
16. failure to repay a loan on time