Credit

       Credit is an abstract mathematical measurement that gauges the trustworthiness of an entity in terms of their financial responsibility. At a high level, in the context of trade and economics, “credit” is a contractual agreement between a lender and a borrower, where the borrower receives something of value today and promises to repay the lender at a later date (usually with a premium for the service). Whenever something is bought on credit, the transaction is only settled at a later date when that credit balance is paid. 

     Entities that have good credit are considered to be financially capable / responsible, thus they can be trusted with a loan. Whereas bad credit typically indicates solvency issues and low level of trustworthiness with money.

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