Types of Credit

A credit is 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.  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.

There are four basic types of credit.  A person will be able to get the most for his/her money and can avoid paying unnecessary charges by understanding how each works.  Credit is a powerful tool that comes in several forms.  It allows a person to buy now with the promise of paying later. 

Some of the different types of credit can be found at the following links.


Inside Types of Credit