Credit Basics

APR is the annualized borrowing-cost measure attached to a credit product.

Available credit is the unused portion of a revolving account's credit limit.

A borrower is the person who receives credit and is responsible for repaying it under the agreement.

Consumer credit is credit used for personal, family, or household purposes rather than business borrowing.

A cosigner is someone who agrees to share legal responsibility for a debt if the primary borrower does not repay.

Credit is the ability to borrow now and repay later under agreed terms.

Foundational consumer-credit terms that explain how borrowing works before readers dive into reports, scores, or collections.

A credit limit is the maximum amount a borrower can owe on a revolving account at one time.

A creditor is the party that is owed repayment on a credit obligation.

A lender is the institution or company that extends credit or funds to a borrower.

The minimum payment is the smallest amount required by the due date to keep an account from becoming late.