Credit

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Dictionary Says

Definition of 'Credit'

1. A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some date in the future, generally with interest. The term also refers to the borrowing capacity of an individual or company.

2. An accounting entry that either decreases assets or increases liabilities and equity on the company's balance sheet. On the company's income statement, a debit will reduce net income, while a credit will increase net income.
Investopedia Says

Investopedia explains 'Credit'

1. The amount of money available to be borrowed by an individual or a company is referred to as credit because it must be paid back to the lender at some point in the future. For example, when you make a purchase at your local mall with your VISA card it is considered a form of credit because you are buying goods with the understanding that you'll need to pay for them later.

2. For example, on a company's balance sheet, a debit will increase the inventory account (an asset) if the company buys merchandise for resale on credit. On the other hand, a credit will increase the company's accounts payable (a liability).  

Related Definitions

Search results for

'Credit'

  • How To Get A Credit Card Despite Bad Credit - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0112/How-To-Get-A-Credit-Card-Despite-Bad-Credit.aspx
    ... How To Get A Credit Card Despite Bad Credit. ... Credit cards are no longer just
    conveniences. They have become necessities of modern life. ...

  • Credit Cards: Introduction | Investopedia

    http://www.investopedia.com/university/credit-cards/
    Credit cards can either help to improve your lifestyle by offering convenient payment
    and helping you build credit, or they can leave you with a pile a of debt ...

  • 4 Common Credit Card Misconceptions - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0212/4-Common-Credit-Card-Misconceptions.aspx
    ... 4 Common Credit Card Misconceptions. Posted ... What is the downside of applying
    for a credit card with a great sign up bonus? Not much. In ...

  • What Credit Score Should You Have? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1111/What-Credit-Score-Should-You-Have.aspx
    ... What Credit Score Should You Have? Posted: November 2, 2011 11:46AM by ... Filed
    Under: Credit Report. A credit score is a number that ...

  • Credit And Debt Management: Introduction | Investopedia

    http://www.investopedia.com/university/credit-debt-management/
    Credit And Debt Management: Introduction. ... Just call us the credit nation, from the
    highest levels of government all the way down to Main Street USA. ...

  • 3 Easy Ways To Improve Your Credit Score - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1111/3-Easy-Ways-To-Improve-Your-Credit-Score.aspx
    ... 3 Easy Ways To Improve Your Credit Score. ... strapped for cash and having trouble making
    ends meet, improving your credit score may be the last thing on your mind. ...

  • What Is A Credit Score?

    http://www.investopedia.com/video/play/what-is-a-credit-score
    Learn about the components and considerations of personal and financial data that
    determine your credit score. ... Videos /. What Is A Credit Score? ...

  • How The Credit CARD Act Impacts Your Finances Today - Investopedia ...

    http://financialedge.investopedia.com/financial-edge/1011/How-The-Credit-CARD-Act-Impacts-Your-Finances-Today.aspx
    ... How The Credit CARD Act Impacts Your Finances Today. Posted: October 7,
    2011 ... Filed Under: Credit Cards. Provided By: As you may know ...

  • Should Your Credit Rating Scare You? - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1111/Should-Your-Credit-Rating-Scare-You.aspx
    ... Should Your Credit Rating Scare You? ... But, how does your credit rating affect
    your life without you knowing - and should it scare you? ...

  • Pros And Cons Of Credit Monitoring Services - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/1011/Pros-And-Cons-Of-Credit-Monitoring-Services.aspx
    ... Pros And Cons Of Credit Monitoring Services. ... Filed Under: Credit Report. Identity
    theft is a complex problem and one that we're relatively powerless to prevent. ...

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