what is the nature of credit?

Question

who was responsible for introducing it?
what the reason for the introduction?
when was it first introduced?
why was it introduced?
i dont need all these answered but it would be helpful, just like to know the answer to the original question. please nothing to do with credit cards etc but the actual term 'credit'

Answer 1

Credit is basically a snapshot of your credit hsitory. It's purpose is to give the lender a good idea about your payment histories in the past.
The concept was first introduced in the 80s (I think) by a company called the Fair Isaac Company. They were the first ones to collect data on individuals from other companies regarding accounts, balances and payments. They are also the original company to create a score based on credit characteristics, better known as the FICO score.
It was introduced so creditors could make lending decisions faster. It used to take days to write companies and verify information ...wait for their response and then continue with business. It was created out of convenience.
Hope that helps!

Answer 2

In finance, credit (as in the term "credit card") is the granting of a loan and the creation of debt. Any movement of financial capital is normally quite dependent on credit, which in turn is dependent on the reputation or creditworthiness of the entity which takes responsibility for the funds.

Credit history or credit report is, in many countries, a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy. The term "credit reputation" can either be used synonymous to credit history or to credit score.

When a customer fills out an application for credit from a bank, store or credit card company, his or her information is forwarded to a credit bureau, along with constant updates on the status of his or her credit accounts, address, or any other changes made since the last time he or she applied for any credit.

This information is used by lenders such as credit card companies to determine an individual's or entity's credit worthiness; that is, determining an individual's or entity's means and willingness to repay an indebtedness. This helps determine whether to extend credit, and on what terms. With the adoption of risk-based pricing on almost all lending in the financial services industry, this report has become even more important since it is usually the sole element used to choose the annual percentage rate (APR).

Answer 3

Credit describes the practice of giving a person access to funds in return for a promise to pay, as well as interest for the use of the funds.

It is, put plainly, renting money. It has been around for centuries. There is evidence of loan activity in Babylon in the 18th century BC, and later in Greece and Rome.

It was invented as a means for persons without capital to obtain funds from those who did have it, for a price. The market for money, so to speak, was thus created.

In modern times, when you use a credit card or take out a mortgage, the bank is allowing you to use some of its money, but you have to promise to pay it back, with interest.

As Noel Gray sang in Cabaret, "money makes the world go round!"

Answer 4

Didn't American Express introduce the first credit card?

Answer 5

Meaning of Credit in Banking, Bookkeeping, & Creditors:

In banking, a credit is an addition to your cash balance, such as a deposit or a reversed fee.

In bookkeeping, a credit reduces your ledger cash account
such as a purchase you made.

In the Credit Card industry, credit is money that is theirs that they have extended in advance for your use with your promise to repay. These are the three meanings of credit.

Answer 6

Check out the link for the etymology (if that's your bag!)