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The Basics of Building Credit

Glossary

budget:
Making a plan for your money in order to spend wisely.
cosigner:
A person who puts his or her name on a loan with a person, offering to make payments if that person cannot do so in the future.
credit:
A measure of how likely a person is to pay back a loan or manage a credit card.
credit card:
A plastic card that represents an account.
credit score:
A number that represents how good or bad a person’s credit is.
debit card:
Different from a credit card, but similar to a prepaid credit card. Usually associated with a bank that allows you to pay for things.
loan:
Something borrowed, like money, which must be paid back.
no credit:
Someone that has no credit history. Not good or bad credit.
outstanding debt:
Debt that has not been paid for over 30, 60, or 90 days.
payment history:
What creditors look at in relation to your credit score to decide if they should loan to you.
prepaid card:
Different from a credit card and similar to a debit card. Usually issued by a credit card company after a deposit has been placed on it in order to make purchases.

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