In the world of finance, the term credit is known as the granting of the loan or creation of a debt. In general the movement of a financial capital is normally quite dependent on credit. Credit on the other hand is dependent on the creditworthiness or reputation of an individual or an entity which is held responsible for the taking of the funds.

In commercial trade the term credit is used in the same manner as that of finance. However in commercial trade it can also be used for the reference of the approval of delayed payments of certain purchased goods. In many cases Credit is not given to an individual or a firm if they are financially instable of returning the payment of the goods, or the amount taken on credit.