what is credit?what is it's importance???
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Credit is the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.
Credit is a very important aspect of buying a home. A lender wants to make sure the borrower will pay back the money. In order to determine if an individual is a good credit risk, a lender looks at four things, called the 4 C’s of credit – capital, capacity, credit history and collateral.
Credit is a very important aspect of buying a home. A lender wants to make sure the borrower will pay back the money. In order to determine if an individual is a good credit risk, a lender looks at four things, called the 4 C’s of credit – capital, capacity, credit history and collateral.
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Answer:
Credit refers to an agreement in which the lender supplies the borrowers with money, goods and services in return for the promise of future payments.
Importance of credit
(i) In some situation, credit helps to increase earnings and therefore the person is better off than before.
(ii) We can understand it with an example. Salim obtains credit to meet the working capital needs of production. The credit helps him to meet the ongoing expenses of production, complete production on time and thereby
increase his earnings. Thus, credit plays a rival and positive role in this situation.
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