Credit

Definition

• Access to money or funds by a borrower on the condition of repayment to the lender over a certain period.

Synonyms
in trust, bond, deferred payment arrangement, loan

Related Terms and Acronyms

• Credit History — Definition,
  • A record of an individual's or company's past borrowing patterns and whether or not debts were repaid on time.
• Credit Risk — Definition,
  • The risk of loss assumed under a financial contract that a borrower or a counter-party to a loan or other credit-related contract may default or fail to fulfill its obligations.
• Credit Score — Definition,
  • Also referred to as a 'Beacon Score' is a number, between 300 and 900, that reflects a person's credit history. Lenders calculate this number using a computer system as part of the process for assigning rates and terms to the loans they grant.
• Home Equity Line of Credit (HELOC) — Acronym, Very Important,
  • An open-ended loan, paid as revolving debt, that is backed by the equity in the property.
  ➥ Also known as a Home Line of Credit.
• Joint Credit — Definition,
  • Credit that is issued to two people based their credit reports and their combined assets and incomes. The repayment of joint credit is the responsibility of both parties.
• Lead Lender — Definition,
  • A financial institution which heads up a financial consortium or syndicate to provide funds for a mortgage.
• Lender — Definition,
  • The bank or mortgage company offering the loan.
• Letter of Credit (L/C) — Acronym,
  • A letter authorizing a person or company to draw on a bank or stating that the bank will honour the credit up to the stated amount.
• Revolver — Definition,
  • A term credit card issuers use for card holders who roll over part of the bill to the next month, instead of paying off the balance in full each month. About seven out of 10 cardholders revolve the debt.
• Revolving Credit — Definition,
  • A line of credit that does not have a specified repayment schedule but may require a minimum payment to cover interest and contribute to paying off principal. Typical of credit card loans, chequing account cash reserve or overdraft accounts that have pre-approved lines of credit.
• Revolving Line of Credit (RLOC) — Acronym,
  • An agreement to lend a specific amount to a borrower, and to allow that amount to be borrowed again once it has been repaid. Most credit cards offer revolving credit.