1. What is Credit ?
2. What is checked before giving credit ?
3. What is credit worthiness ?
4. Who can get credit ?
1. What is Credit ?
Monetarily, credit is the amount that you borrow on the condition that you repay later. Credit can also be considered as a loan.
When you buy something on credit, the seller considers the the amount to be paid by you as credit given to you, which you would later repay as per the agreement/understanding between you and the seller.
2. What is checked before giving credit ?
3. What is credit worthiness ?
The person/body giving credit to you would in normal case assess your credit worthiness i.e., whether you would be able to repay the amount taken on credit along with interest, if interest is also being charged on the credit amount.
4. Who can get credit ?
This depends on who you are taking credit from, your friend, the grocery shop, bank, etc. The more professionally involved the lender in this business the more stringent their method of verifying your credit worthiness.
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