A creditor is a person or organization that has lent money to someone else and expects to be paid back. If you borrow $20 from your older sister to buy a birthday present, she becomes your creditor until you repay her. If a family takes out a mortgage to buy a house, the bank becomes their creditor, sometimes for decades.

When someone becomes a creditor, they're trusting that they'll get their money back. That's why creditors often check whether borrowers have a history of repaying debts before agreeing to lend.

Creditors can range from friends lending a few dollars to massive banks lending millions. A store that lets customers buy now and pay later is also a creditor. When a business buys supplies but doesn't pay immediately, the supplier becomes a creditor.

The opposite of a creditor is a debtor, the person who owes the money. Being a creditor means taking a risk: you might not get paid back. But it also means you trusted someone enough to help them when they needed it, which is why keeping your promises to creditors matters.