Unsecured debt
GeneralDebt not backed by any collateral. Credit cards, personal lines of credit, and payday loans are unsecured. Because the lender cannot seize a specific asset, these loans usually carry higher interest rates.
Read more about this →Related terms
-
Secured debt
A loan backed by collateral — something the lender can take if you do not repay. Mortgages and car loans are common examples. Secured loans typically have lower interest rates because the lender has less risk.
-
Credit score
A number between 300 and 900 that represents how reliably you have handled borrowed money. Lenders, landlords, and some employers check this score. Paying bills on time and keeping balances low are the two biggest factors.
-
Debt
Money you owe to someone else, whether a bank, credit card company, family member, or other lender. Not all debt is harmful — a mortgage or student loan can build toward something — but high-interest debt like credit cards can trap you.