Definitions (3)

1. A journal entry recording a decrease in assets. With cash basis accounting, credits are recorded when income is received. With accrual basis accounting, credits are recorded and recognized when income is earned. Compare to Debit.
2. A contractual agreement in which a borrower receives something of value now and agrees to repay the lender at some later date. When a consumer purchases something using a credit card, they are buying on credit (receiving the item at that time, and paying back the credit card company month by month). Any time when an individual finances something with a loan (such as an automobile or a house), they are using credit in that situation as well.
3. The borrowing capacity of an individual or company.

Use credit in a sentence

I had really bad credit, so I knew I would probably not be eligible to buy the house that I wanted.

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In order to establish a reliable line of credit, I had to open a credit card account and pay it off every month. Then, I was able to get a good loan.

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I didn't have enough money to buy the dress that I wanted at the mall today so I asked the cashier if they offered in store credit.

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Japan Credit Rating Agency (JCR) commitment fee