Credit
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Credit, Money

General Information
Credit is money that you borrow when you need to make a purchase. The credit is a loan, which needs to be paid by a certain date often with interest and other charges that may apply.

Credit is important if you need to make a large purchase such as a house or a car and it's a good idea to keep up to date with your payments if you want to maintain a good credit rating because employers or landlords may check your credit before offering you a job or allowing you to rent a home.

There are different types of credit available:
  • Charge cards – the balance needs to be paid every month
  • Service credit – paying utility or service providers
  • Installment credit – paying regular amounts over a set number of months
  • Revolving credit - your credit risk will be evaluated and you will be given a maximum credit limit. You must make payments each month
  • Mortgage – a significant amount of money to purchase a house which may take several years to pay background
  • Loans – fixed amount of money borrowed which must be paid back over a set period of time
  • Overdraft – an extension to the money you have in your current account, which must be paid back, charges may apply to have this service on your account. 
Origins
As far back as 1300BC the Babylonians and Assyrians were loaning money and by 1000BC they had developed a way for merchants to receive payment even if they were far away. During the Middle Ages credit bills were used to trade in Italian cities and lending was a common practice.

There were major changes in the American economy during the 1800s where terms of sale developed and where payments were originally expected in a 12-month period before this these loan terms became shorter. In the 1830s America landed on difficult times, many banks closed and many businesses went bankrupt. A Mercantile Agency was created in 1841 by Lewis Tappan and this became Dun & Bradstreet which transformed credit and commerce in America from this time.

Specifics
There are a number of online credit history websites which can give you an accurate insight into your own personal credit score and provide you with advice about improving your credit rating, paying off your current debts and making sure you maintain a good score so getting credit in the future won't be a problem and help you find out if your ready to take on credit for example a mortgage or loan. They also can offer protection against identification theft and fraud. This kind of service gives you better control over your finances and your eligibility for credit in the future. Revised September 22nd, 2015 Submit a Website
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