creditor
KRED-i-ter
/ˈkrɛdɪtər/
A person, bank, or business to whom money is owed because they have provided goods, services, or loans.
Specifically refers to the entity that extended the credit, as opposed to the borrower (debtor).
The story behind the word. From the Latin 'creditor', meaning 'one to whom money is due', which comes from 'credere' (to trust or believe). The creditor is the one who trusts that you will pay them back.
Word relationships
- lender: Lender usually refers to an institution providing cash loans, while creditor can also refer to businesses that provided goods or services on credit.
- debtor: A debtor is the person or entity that owes money to the creditor.
Commonly confused with
- collector: A creditor is the original owner of the debt, whereas a collector is often a third-party agency hired to recover the money.
Word family
- credit (noun): The ability of a customer to obtain goods or services before payment.
- credit (verb): To add money to an account.
Collocations
- secured creditor
- unsecured creditor
- creditor rights
Example sentences
- "The creditor agreed to restructure the debt payments to avoid a total default." Debt negotiation process
Memory hook
The creditor is the one who gives you 'credit' because they believe you will pay them back. The one who trusts you with money.
When not to use
Do not use to describe a person who simply gives a gift; there must be a legal obligation to repay.
Fun facts
- In ancient Rome, creditors had the legal right to enslave debtors who failed to repay their loans.
Related words
Also appears in
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