What is credit?

If you do not have cash to buy certain goods and services (a car, for example), then the salesperson may be willing to sell the item to you in exchange for your promise (almost always made in writing) to pay the purchase price over time in installments. That is buying on credit. Your ability to buy on credit depends on your credit rating. If you have a good credit rating (for example, you have a history of paying your bills on time or you have a dependable income), then you are more likely to be able to buy goods and services on credit. american citize