Credit Score or FICO Score
A credit score is a number that indicates your creditworthiness. The most commonly used type of credit score is a FICO Score, which was developed by the Fair Isaac Corporation.
It gives you a score between 300 and 850. The higher the score the better.
For more information, check out: What is Credit Score / FICO Score? A Simple Explanation for Kids, Teens and Beginners
Credit Bureau
A credit bureau is a company that collects information about your financial transactions, which is then used to create your credit reports and credit scores.
This information is used by potential lenders, employers, landlords, etc.
For more information, check out: What is a Credit Bureau? A Simple Explanation for Kids, Teens and Beginners
Credit Card
A credit card is a plastic card that you use to pay money at stores and online.
A bank or financial institution lends the money to you, which you have to repay. If you repay late, then you’re charged interest.
For more information, check out: What is a Credit Card? A Simple Explanation for Kids, Teens and Beginners
Store Card
A store card or a store credit card is a type of credit card that is offered by a retail store, and can only be used to make purchases at that specific store or store family.
They often come with some special bonuses like additional discounts and extra points.
For more information, check out: What is a Store Credit Card or Store Card? A Simple Explanation for Kids and Teens
Borrowing or Loan
Borrowing is taking money from someone for a specific purpose or an unforeseen event, with a promise to pay it back.
This repayment to the lender usually happens over time, and you have to pay a little extra money – called interest.
For more information, check out: What is a Loan? A Simple Explanation of Borrowing for Kids, Teens and Beginners
APR
APR – or Annual Percentage Rate – is the yearly cost of borrowing, represented as a percentage.
The lenders are required to disclose the loan’s APR before signing the contract with the borrower.
For more information, check out: What is APR (Annual Percentage Rate)? A Simple Explanation for Kids and Beginners
Student Loan
A student loan is a loan that you can take to pay for your college education. It can be used for tuition, room and board, books, and other costs related to college.
For more information, check out: What is a Student Loan? A Simple Explanation for Kids, Teens and Beginners
Mortgage
A mortgage is a loan you take to buy a home. You usually have to repay the mortgage in 10 to 30 years.
For more information, check out: What is a Mortgage? A Simple Explanation for Kids, Teens and Beginners
Refinancing
Refinancing is the process of replacing an existing loan with a new loan that has better terms.
Refinancing is most common for mortgages, but pretty much any type of loan can be refinanced, including auto loans, student loans, and personal loans.
For more information, check out: What is Refinancing or Mortgage Refinancing? A Simple Explanation for Kids