3.1 Cengage

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What is a creditor?

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An organization or person who extends credit to debtors.

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What is a debtor?

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An organization or person who uses credit.

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What is earning power?

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A person’s ability to earn money now and in the future.

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What is credit?

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When something is bought that is not paid for at the time of purchase.

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What is a down payment?

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The upfront money applied to a purchase that is made using a loan (credit).

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What is credit rating?

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An assessment of a debtor's creditworthiness, indicating the likelihood of repayment.

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What is a credit report?

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A detailed report of an individual's credit history, used by lenders to evaluate creditworthiness.

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What are deferred payment plans?

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Agreements that allow consumers to delay payment for a purchase to a later date.

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What are layaway plans?

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Payment plans that allow consumers to reserve an item by making a series of payments before taking possession.

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What is an installment plan?

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A payment plan that allows consumers to pay for a purchase in fixed amounts over time.