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Credit
In simple accounting terms a credit is a reference to money gained. In terms of lending, however, it is a measure of debt potential. An individual's credit score or rating is a representation of the degree to which they are able to amass debt or to borrow money on the promise of future payment. So, while credit represents gain in the sense of being able to make large purchases, it also represents the creation of debt since those purchases were made without actual cash in hand.
In a check register scenario, every deposit the individual makes (money that is put into the account) is a credit, whereas ever check or withdrawal that is made is a debit. In a lending scenario, however, when credit is received, the individual is allowed to borrow money or to defer payment on a set amount or "credit balance." The more money borrowed or the more payments that are deferred, the greater the debt amassed. Thus, credit is the degree to which an individual is considered financially capable of incurring and
being responsible for debt.
More terms explained
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