What is credit and how does it impact my financial situation?

Credit is an agreement in which a borrower receives funds, goods or services from a lender with a promise to repay the loan at a later time, usually with interest. Credit can come in various forms, such as credit cards, personal loans, mortgages, and other financial products.

Your credit history and credit score play a significant role in determining whether you can access credit and how much interest you will have to pay. A good credit history and score can help you qualify for better interest rates, while a poor credit history and score can make it challenging to access credit or result in higher interest rates.

In addition, using credit responsibly can help you build a positive credit history and score, which can make it easier to obtain credit and get better rates in the future. However, using credit irresponsibly can lead to debt, financial problems, and a negative impact on your credit score.