Glossary
Credit Card - glossary for children
A card that can be used to pay or take out money provided as a loan by a bank or financial institution up to a certain limit. The money must be paid back on time, and if it is not, interest is usually added. There is also often a fee for getting the card, withdrawing cash, or paying in a different currency.
Credit History
Information about an individual’s past and current loans, including their amount and number, repayment behaviour, whether the individual has credit cards and how much they owe relative to their credit limits, as well as details about owned movable and immovable property. Timely repayment of obligations contributes to a good credit history.
Credit Intermediary
A natural or legal person who, in return for remuneration, provides intermediary services in the offering or conclusion of credit agreements with consumers, as well as advice and consultations related to such agreements.
Credit Limit - glossary for children
The highest amount of money that can be spent using a credit card.
Creditor
An individual or legal entity, including a bank or licensed financial institution, that is legally authorised to provide loans or credits and has the right to demand repayment of financial obligations from the borrower or loan recipient. The creditor may exercise their rights under the credit agreements in accordance with applicable law, including claiming principal and interest payments and, if necessary, enforcing any provided collateral.
Credit Provider/Lender
A bank or licensed financial institution authorized by law to carry out lending activities, providing loans or credits to individuals or businesses under agreed terms and conditions, usually in exchange for interest and with a specified repayment period.
Credit Recipient/ Borrower
An individual or legal entity that receives a loan or credit from a bank or licensed financial institution under agreed terms, usually in exchange for interest and with a set repayment period. Unlike a loan recipient, who may receive money or goods on loan from private individuals or other organizations, a credit recipient always uses a loan provided by an authorized financial institution.
Credit risk
The risk that a borrower or counterparty will fail to meet their financial obligations, such as repaying a credit or paying interest on time. It represents the probability that one party will default on payments, potentially causing losses to the other party involved in the financial or commercial agreement.
Credit Score / Credit Rating
A numerical assessment of an individual’s creditworthiness, indicating how reliable they are in repaying loans. It is determined by banks and non-bank financial institutions based on algorithmic analysis of income, credit history, indebtedness, and other relevant factors.
Creditworthiness
A comprehensive indicator reflecting the borrower’s ability to meet their financial obligations to creditors on time and in full.
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