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What Is a Creditor, and What Happens If Creditors Aren’t Repaid?

In business, there are many different types of creditors. A creditor is simply a person or entity to whom money is owed. If you owe money to a creditor, you are said to be in debt to them. There are two main types of creditors: secured and unsecured. A secured creditor is one who has some sort of security for their debt, such as a mortgage on a property. An unsecured creditor is one who does not have any security for their debt. If you fail to repay your creditors, there can be serious consequences. Secured creditors may be able to repossess the security they are owed, and unsecured creditors may take you to court. In either case, failing to repay your creditors can damage your credit rating and make it difficult to get credit in the future.

What is a creditor?

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Written by Debra Strauss

Debra, a culinary mother, is a three-child mother who graduated from the Chinese University of Hong Kong with a bachelor's degree in economics and Chinese.

Debra loves living and sharing and is currently working full-time on article writing.