What is credit & how does it work?

Credit is the ability to borrow money under the agreement that you’ll repay the debt later. Credit agreements typically come with repayment terms that include when payments will be due, plus any interest and fees you’ll need to pay. Credit can also refer to an individual’s history of borrowing and repaying debt. What Is Credit?

What does credit mean on a credit report?

Credit also refers to your borrowing history, or how you've handled paying debts in the past. Your credit behavior is recorded on your credit reports, and the information on these reports is used by FICO and VantageScore to calculate your credit score.

What do you need to know about credit?

The ability to borrow money with the promise that you'll repay it in the future, often with interest. You might need credit to purchase a product or use a service that you can’t pay for immediately, like a car, laptop or home repair. Your financial history, which includes your record of borrowing and paying back money.