You've probably heard the phrase, “Give her the credit she's due,” or “You deserve credit for a job well done.” Well, the notion of credit for a job well done extends beyond your personal, academic, or professional achievements and into your financial life. In the financial sense, credit is an agreement between a lender—a bank, credit union, credit card issuer, utility company, or other institution that has a financial stake—and a borrower. The lender agrees to grant the borrower purchase power, usually in the form of cash or a line of credit. The borrower agrees to repay any sums borrowed plus interest. Lenders will perform a credit check to determine if the borrower is creditworthy. There are degrees of creditworthiness. If the borrower has a positive credit profile, the terms of the credit will be more favorable than for those who have negative information in their credit profile.

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