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Credit can be simply defined using three (3) aspects:

* Secured (Collateralized) or Unsecured Credit (is there an asset positioned as a backstop to cover the debt if the borrower defaults)

Example: Auto loan is secured by the car, a credit card is unsecured

* Installment or Revolving Credit (is the loan fixed at a certain amount and paid back in similar installments over time or can the principal and payment of the loan change over time)

Example: Auto loan is installment, home equity line of credit is revolving

* Personal or Business Credit (is the business for an individual/family or for a business)

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14y ago

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