Credit is a term used to describe an arrangement in which a borrower is allowed to borrow money or goods with the promise of repaying it in the future. In a credit arrangement, the borrower receives the benefit of using the money or goods immediately, while the lender (or creditor) is promised repayment, usually with interest or fees added.
Credit can take many forms, such as loans, credit cards, lines of credit, and mortgages. In each case, the borrower receives access to money or goods that they do not have to pay for immediately. Instead, they are required to make payments over time, typically with interest or fees added.
Credit is an important part of the modern economy, allowing individuals and businesses to finance purchases, investments, and other expenses. However, it is important to use credit responsibly and to make payments on time in order to avoid high interest rates, fees, and damage to credit scores.