What is credit?

Credit Definition: Credit is the level of eligibility or creditworthiness of a business or an individual based on credit history, payments, loans, and overall financial status. In accounting, credit refers to the process of decreasing an asset or recording a decrease in value or expense.

At the same time, it can also refer to an increase in a payable or an amount owing, such as a loan. When a party applies for a loan or a credit card, previous credit history is typically reviewed to determine if a borrower qualifies for a product and how much they can borrow. Credit may also impact the interest rate, installment plan, and other factors that impact the amount you can obtain for funding a business, or personal purchase, such as a car or student loan.

Credit often refers to a lender’s agreement with a borrower to repay an amount based on a specific term, installment payments, and interest.

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Other credit report terms:

Credit Report Help Centre:

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