Credit

Definition

Credit refers to the ability of an individual or business to borrow money with the promise of repayment in the future. It allows people to make purchases or investments without having to pay for them immediately.

Related terms

Debt: Debt is the total amount of money owed by an individual, business, or government entity. It includes both borrowed funds (credit) and any outstanding balances.

Interest Rate: The interest rate is the cost of borrowing money, expressed as a percentage. It represents how much extra you have to pay back on top of the original loan amount.

Credit Score: A credit score is a numerical representation of an individual's creditworthiness based on their financial history. Lenders use it to assess the risk associated with lending money.