Based on chapters 6 and 7 I learned that credit is your reputation for financial responsibility. This can entitle you to be trusted when buying or borrowing money. When the lender believes you can repay your debt then they will give you more money. Credit is also the time you have to pay off your debt. Once you pay off the debt and can be trusted your credit score/limit increases and you will be able to borrow even more money.
As a lender you need to make sure you are aware of the applicants previous financial activities. They should show that this individual has been paying off debts in the past. The lender should also know what the applicant needs the loan for and if its for a good cause. As a lender you must also be aware of the applicants credit and employment history. They must have collateral and have the capacity to repay the loan.
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