Concept in Definition ABC

Credit as is clear from analyze the etymology of the word that has a Latin origin means trusting thing, among other things, then, it is this, trust or to have confidenceand the story comes to that it is precisely on the trust that will be based the credit that a private individual or a bank will be based, the latter being the institution more common to ask for it.

In the right to credit It will be that a creditor party will exchange a present wealth for a future one to another party, which from the moment of the change will become the debtor party.

The economic activity o financial understands credit as confidence in the obligation contracted, the ability to deliver, the responsibility and the creditworthiness of the individual who took that credit. Although of course, there are exceptions and to take conscience of these you just have to look at the disaster that is today economy American.

One of the most common types of credit is known as pledge(pawn), This basically consists of the loan that is granted against a security of movable value, in most cases. And the procedure that will follow is the following: the asset will remain in the bank until the person complies with the payment that was advanced according to the term that has been set to return it. Otherwise, in the event of the breach of the contracted obligation, the pawned asset will be taken as part of payment and it will probably be possible for auction. This modality is widely used, for example, in most of the pawn shops that exist in the world.

While the credit granted by a bank to a client, another of the most common also, involves the advance of a money that must then be paid in a period of time subject to the interests that the entity has prior agreement with the individual who requested it.