We've organized the most common financial terms and explained them in simple, friendly ways.
Secured Credit Card
A credit card that is literally "secured" by a cash deposit provided by the consumer, which doubles as part of or their entire line of credit. Secured credit cards are used to build up credit and act as bridges to higher-end cards.
Secured Debt
A loan product that is backed by an asset, like a mortgage or auto loan, where the house or car act as collateral, respectively, in the event the loan becomes delinquent or goes into default.
Simple Interest
Interest that is only charged to the principal amount of a loan balance. It is the opposite of compound interest (most common with credit cards) where interest can be charged to the interest on a principal debt balance (i.e., interest on interest).
Soft Credit Inquiry
A credit inquiry (or pull) that gathers the bare essentials of a person's financial record. While a soft credit inquiry will show up on a credit report, it is only visible to the individual owner and has zero impact on their credit score. Soft credit pulls allows lenders to assess the eligibility of potential borrowers. A person checking their own credit report is also considered a soft inquiry.
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