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May 10, 2024 · What Is Credit and Why Is It Useful? Credit has two definitions: an agreement with a lender to borrow money and pay it back later, and a record of your borrowing history, found in your credit...
The meaning of CREDIT is reliance on the truth or reality of something. How to use credit in a sentence. Synonym Discussion of Credit.
CREDIT definition: 1. praise, approval, or honour: 2. used to say that someone should be praised for something…. Learn more.
- What Is Credit?
- Credit in Lending and Borrowing
- Other Definitions of Credit
- The Bottom Line
The word "credit" has many meanings in the financial world, but it most commonly refers to a contractual agreement in which a borrower receives a sum of money or something else of value and commits to repaying the lender at a later date, typically with interest. Credit can also refer to the creditworthiness or credit historyof an individual or a co...
Credit represents an agreement between a creditor (lender) and a borrower (debtor). The debtor promises to repay the lender, often with interest, or risk financial or legal penalties. Extending credit is a practice that goes back thousands of years, to the dawn of human civilization, according to the anthropologist David Graeber in his book Debt: T...
"Credit" is also used as shorthand to describe the financial soundness of businesses or individuals. Someone who has good or excellent credit is considered less of a risk to lenders than someone with bad or poor credit. Credit scores are one way that individuals are classified in terms of risk, not only by prospective lenders but also by insurance ...
The word "credit" has multiple meanings in personal and business finance. Most often it refers to the ability to buy a good or service and pay for it at some future point. Credit may be arranged directly between a buyer and seller or with the assistance of an intermediary, such as a bank or other financial institution. Credit serves a vital purpose...
Credit (from Latin verb credit, meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), but promises either to repay or return those resources (or other materials of equal value) at a later date.
The term credit has several financial meanings, but all of them are based on the confidence and trust that lenders or vendors have in an individual’s ability to pay in a timely fashion. (Credit is ultimately derived from Latin crēdere “to believe, entrust, give credit.”)
- DictionaryCred·it/ˈkredət/
noun
- 1. the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future: "I've got unlimited credit"
- 2. an entry recording a sum received, listed on the right-hand side or column of an account: "the columns should be added across and down and the total debits should equal the total credits"
verb
- 1. publicly acknowledge someone as a participant in the production of (something published or broadcast): "the screenplay is credited to one American and two Japanese writers"
- 2. add (an amount of money) to an account: "this deferred tax can be credited to the profit and loss account"
The word credit can have many meanings — from giving someone the recognition they deserve, to providing goods or services for payment that comes at a later date. The meanings of credit don't end with borrowing money to pay at a later date or giving someone your approval.
