Chapter 4

3. 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
6. the original amount of a loan; the total amount borrowed before interest
8. the amount of time, in months, that you’ll be making payments
9. Credit: a loan for a fixed amount of money that‘s paid back in monthly installments
11. the loss of value of an asset over time
13. Asset: an asset that increases in value over time
15. the additional cost a lender charges for borrowing their money
16. Credit: credit that automatically renews whenever a payment is made to reduce the debt

1. failure to repay a loan on time
2. Score: a statistical number used to represent a consumer‘s creditworthiness
4. Asset: an asset that loses value over time, such as a car that’s worth less every year
5. Equity: when the value of an asset falls below what is owed on it
7. the increase in value of a home over time; the difference between the amount owed and what the home could be sold for
10. Bureau: a company that collects credit rating information and makes it available to creditors
11. money owed to another person or company
12. a legal claim against (or right to own) an asset until the debt (loan) is repaid
14. Lending: a lender who uses deceptive, unfair, or fraudulent practices on borrowers who are desperate for cash