credit

The ability of a business or person to borrow money, or obtain goods on time, in consequence of the favorable opinion held by the particular lender as to solvency and past history of reliability. In re Ford, B.C.Wash., 14 F.2d 848, 849.

Confidence in buyer's ability to meet financial obligations at some future time.

Time allowed to the buyer of goods by the seller, in which to make payment for them.

The correlative of a debt; that is, a debt considered from the creditor's standpoint, or that which is incoming or due to one. That which is due to a person, as distinguished from debit, that which is due by him. Claim or cause of action for specific sum of money.

Availability of funds from financial institution or from letter of credit.

"Credit" means the right granted by a creditor to a debtor to defer payment of debt or to incur debt and defer its payment. Uniform Consumer Credit Code, Section 1.301(7).

In accounting, a credit is a component of a journal entry which increases revenues, liabilities, and equity; and decreases assets and expenses.

In taxation, credits reduce the tax liability as computed, as opposed to deductions which reduce the taxable income. Examples of tax credits include; credit for child and dependent care expenses, credit for the elderly or permanently disabled, etc.

See also confirmed credit

- credit line

- Fair Credit Reporting Acts

- installment credit

- investment tax credit

- letter of credit

- notation credit

- open credit

- open-end credit

- revocable credit

- revolving credit

- tax credit

Compare debit.

bank credit

Money that bank owes or will lend individual or person. See also bank credit

Bill of credit.

See bill