Credit meaning

Credit word means that the ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future. If you get credit from a credit grantor, whom you agree to pay back the amount with applicable finance charges at an agreed-upon time. There are 4 (four) types of Credit

1. Revolving Credit : This means credits that is automatically renewed as debts are paid off. In revolving credit you are given a maximum credit limit and you are charged up to that limit. Each month, you carry a balance (or revolve the debt) and make a payment. Most credit cards are a form of revolving credit.
2. Charge Cards : it is looks like revolving credit cards & used in the same way, charge accounts differ in that you must pay the total balance every month. It is a credit card for use with an account which must be paid in full when a statement is issued.
3. Service Credit : Your agreements with service providers are all credit arrangements. You receive electricity, cellular phone service, gym membership, etc., with the agreement that you will pay for them each month. Not all service accounts are reported in your credit history. In direct words, Service credits (or service level credits) are a mechanism by which amounts are deducted from the amounts to be paid under the contract to the supplier if actual supplier performance fails to meet the performance standards set in the service levels.
4. Installment Credit : With installment credit, a creditor loans you a specific amount of money, and you agree to repay the money with interest in regular installments of a fixed amount over a set period of time. Car loans and mortgages are two examples of installment credit. In short, credit for a fixed sum to be repaid in installments, e.g. for hire purchase.