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Credit

Credit

1. An agreement between a buyer and a seller in which the buyer receives the good or service in advance and makes payment later, often over time and usually with interest. For example, a buyer may purchase a computer on credit for $600 and pay $100 per month over several months with interest. One of the most common ways of buying on credit is to use a credit card, but many companies have their own credit schemes. A steady flow of credit in an economy is considered important for financial health. See also: Accounts receivable, Accounts payable.

2. The amount in a bank account or some other account. For example, if one has $800 in his/her bank, he/she is said to have an $800 credit. Likewise, if he/she receives a check for another $200, he/she receives a further $200 credit.

credit

1. The ability to borrow or to purchase goods and services with payment delayed beyond delivery.
2. An accounting entry resulting in an increase in liabilities or owners' equity or in a decrease in assets. Compare debit.
3. The balance in an account.

Credit.

Credit generally refers to the ability of a person or organization to borrow money, as well as the arrangements that are made for repaying the loan and the terms of the repayment schedule.

If you are well qualified to obtain a loan, you are said to be credit-worthy.

Credit is also used to mean positive cash entries in an account. For example, your bank account may be credited with interest. In this sense, a credit is the opposite of a debit, which means money is taken from your account.

credit

  1. a financial facility which enables a person or business to borrow MONEY to purchase (i.e. take immediate possession of) products, raw materials and components, etc. and to pay for them over an extended time period. Credit facilities come in a variety of forms including BANK LOANS and OVERDRAFTS, INSTALMENT CREDIT, CREDIT CARDS and TRADE CREDIT. Interest charges on credit may be fixed or variable according to the type of facilities offered or, in some cases, loans may be interest-free as a means of stimulating business. See CREDIT CONTROL, MONETARY POLICY, EXPORTING, LETTER OF CREDIT, BILL OF EXCHANGE, CONSUMER CREDIT ACT 1974, INTEREST RATE.
  2. to acknowledge (in DOUBLE-ENTRY ACCOUNTS) the receipt of services rendered to a firm. This is done by making an accounting entry which records the value of goods or services received by the company in the company's account of the supplier of the goods or services. A credit entry in a company's double entry accounts represents either a decrease in the company's assets or an increase in its liabilities. See DEBIT.

credit

a financial facility that enables a person or business to borrow MONEY to purchase (i.e. take immediate possession of) products, raw materials and components, etc., and to pay for them over an extended time period. Credit facilities come in a variety of forms, including BANK LOANS and OVERDRAFTS, INSTALMENT CREDIT, CREDIT CARDS and TRADE CREDIT. Interest charges on credit may be fixed or variable according to the type of facilities offered or, in some cases, ‘interest-free’ as a means of stimulating business.

In many countries CREDIT CONTROLS are used as an instrument of MONETARY POLICY, with the authorities controlling both the availability and terms of credit transactions. See CONSUMER CREDIT ACT 1974, INTEREST RATE.

credit

(1) In finance,the availability of money.(2) In accounting, a liability or equity entered on the right side of the page in double-entry accounting. The concept is confusing to most consumers because an accounting “credit” does not mean more “stuff” such as property or money; it merely indicates the side of the page on which the entry is posted.The other entry is called a debit.

References in periodicals archive ?
On the supply side of the market, changes in funding costs are less important to credit card operations than to other credit activities, and the risks inherent in this unsecured form of lending seem generally to increase at times when costs of funds are declining.
In 1998, the Fair Isaac Corporation changed the FICO scoring formula to remove references to credit counseling in consumers files after learning that receiving credit counseling was becoming less predictive of credit risk.
The flexible analytics, proven risk expertise and powerful data management capabilities that are at the heart of this SAS solution empower companies to quickly meet changing regulatory and business requirements related to credit risk management.
is a wholesale supplier of investment, liquidity, correspondent services and consulting to credit unions nationwide.
Credit Acceptance provides its dealer-partners with financing sources for consumers with limited access to credit and delivers credit approvals instantly through the internet.
Second, it developed a cutting-edge, Internet-based automobile loan application tracking system with connectivity to credit unions and dealers that supports standard and custom credit union decisioning matrices.
Armed with this knowledge, borrowers can take steps to improve their credit worthiness, giving them access to credit on the most favorable terms.
The Kansas Credit Union Association provides check processing services to credit unions in Kansas and Nebraska.