What is credit?

Provision of resources granted by a lender in which the receiving party does not immediately reimburse the lender and instead agrees to repay the lender at a later date, often times in an amount greater than the initial debt.

Credit by itself simply refers to a situation where something of value such as cash, a home, or a vehicle is given in exchange for a promise of payment. When most people think about the term credit, however, they think of a credit rating and whether they have good credit or bad credit.

In today’s credit driven society, credit is necessary because people rarely have the immediate cash available to make large purchases such as a new home.

The ability receive credit is predicated on your credit rating and the more responsibly you have managed credit in the past, based on a lender’s assessment of your credit history, the more credit your can qualify for and the less you will have to pay in interest rates.

Credit and your credit reports

Because your history of using credit plays such a big role in your future ability to get credit, it is in your best interest to make sure your credit history gives lenders a fair impression of you as a debtor. Since the vast majority of lenders use your credit reports as a record of your credit history, this involves making sure your credit reports are free from errors and bias.

When your credit score is low because of questionable negative items in your credit reports, you have the right to dispute these items. For 28+ years, Total Credit Solutions has helped clients work towards a fair an accurate credit score by helping them take advantage of this right.


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