What Is Credit ?

Credit is trust which allows one party to provide resources to another party and  when the second party does not reimburse the first party by the agreed due date, it creates debt. The resources provided may be a loan, or may consist of a good or services. For example: You purchase a television from blah blah company but, you don't pay for the television when you first get it. You promise to make payments on it each month until the television is paid in full. If your pay for the television as promised, it will show up to the credit bureau's as paid in full, giving you points on your credit report. Sort of like a report card. You get a good grade if you pay in full and when you pay on time and so on.


Credit bureau's such as Experian and Trans Union keep a list of consumers purchase's ,paid bills and unpaid bills as a resource for creditors to determine whether or not to grant a consumer credit with their company. They collect information from various sources and provide consumer credit information on individuals to companies. It is best to keep your credit as clear of debts as you can because the better your credit score is the better the opportunities you will have to purchase a home, a car, to get a loan or approved for anything that requires you to have a credit check.