Meaning of “credit”
"You're looking at the ""wrong"" credit. Here's the Wikipedia article about the bookkeeping (vs the Finance, that you've quoted) term."
Debit is them taking the money, in your case electronically.  Credit is somebody vouching for you and saying you will pay later. They are alternate ways to pay for a product.  As a merchant, if you take a credit card you are agreeing that a the issuer of the credit card is going to pay you right away.  The issuer of the credit will worry about collecting the money from me.   There are a ton of details with regards to why you would use one over another, where the costs in each method are and who pays what for each.  The main different is the source of the funds. Thanks for that, it did help.   I think my issue is I don't work in finance itself, I'm a lawyer, and 'capital' generally has a very specific meaning in English company law, where it refers exclusively to shareholder capital.   I realise capital in finance terms includes both debt and equity investment. In credit means you have over paid.  I tried with my account. After clearing my bill to 0.0 I paid an extra £10 just to confirm the that money appeared as £10 in credit on the energy website. "Credit Scores / Rates are based on sometimes simple and sometimes quite complex Statistical Models (Generalised Linear Models, Neural Networks, Regression and Classification Trees, Mixture Models, etc).This depends on whether it is something more general like FICO or what large banks develop in-house. In any case, there are many legislation-dependent factors (Qualitative such as education, occupation security, sex, etc, payment history; or Quantitative such as age, liquidity and leverage ratios, etc).  Now, most model that are used today are propriety and closely held trade secrets. The most important reason for this is actually because of the databases that feed the models. More better quality data is what makes the real difference ... although at the cutting-edge, the mathematicians/statisticians/computer scientists that design the algorithms will make a huge difference.  Now, back to the main thing: The Credit Score/Rate is meant to be used only as an indicator for representing the Probability of Default (""How likely you are to default on your obligation towards me?"" is what it means and that is largely based upon ""Has company/he/she honoured his financial obligations?"") of a certain consumer. In more sophisticated models, they may also use your industry sector or occupational and financial security to predict the future behaviour. However, this ""Credit Score"" has meaning only in relation to a ""Credit Limit"" (""Can you pay back my $X?""). The credit limit on the other hand is defined by your income level, debt/asset, etc).   As a credit risk analyst, whether we are dealing with large corporate loans, mortgages, personal loans, etc), the principles are the same: One thing to consider is that factors considered in determining a credit score usually do not have a simple linear relationship.  Consumer Profile types such as utilisation rate are a lot more about EFFECT than CAUSE:   The most important thing is to honour your obligations, whether you pay before or after you spend makes little difference, so long as you pay in full and prior to maturity, your rate/score will improve with time. Financial Institutions have many ways to make money of everyone. Some, such as interest rates and fees are directly charged to you and some are charged to your goods-and-services providers. That has no bearing on your score. Sometimes it even makes sense to take on customers with rock-bottom ratings, lend them lots of money, and charge them to dirt. As you may well know, the recent financial crisis - with ongoing after-shocks and tremors - was the result of such practices." In this example you are providing 4x more collateral than you are borrowing.  Credit score shouldn't matter, regardless of how risky a borrower you are.  Sure it costs time and money to go to auction, but this can be factored into your interest rate / fees. I don't see how the bank can lose. "In double-entry bookkeeping, no transaction is ever negative. You only deal in positive numbers. We ""simulate"" negative numbers by calling numbers debits and credits, where one is the negative of the other. Only a balance can be negative. In this case, Income is a credit account. That means that things that increase your balance are credits and things that reduce your balance are debits. So a gift from grandma is a credit. It's a positive number, and you write it in the credit column. You pretty much never subtract from Income except to correct a mistake. Assets, like a checking account, are debit accounts. Increases are debits and decreases are credits. You routinely have both debits and credits on a checking account, i.e. you put money in and you take money out. Every transaction affects (at least) two accounts: one with a debit and one with a credit. So in this case, the gift from grandma credits income and debits checking. Buying food credits checking and debits expenses." With change in technology and regulations, quite a few clearing systems provide an ability to directly credit a credit card. In Europe Sepa transactions allow one to credit a credit card. The service would be offered by Local bank rather than Visa or Master Card &gt;Actually, I would imagine the terms for credit are better post-bankruptcy filing, than immediately pre-filing.   From what I see that's true. Pre filing had no options whatsoever or the terms were so bad that it wasn't worth it. Post filing, while the terms were not the best by no means, at least there were decent options there. Is it possible for the card issuing banks to check my score without my permission? As far as I understand these things, that is exactly the whole purpose of these sorts of credit-rating institutions. The banks and other financial businesses are their customers. They exist to serve those customers. Their relationship, if any, with a consumer is probably secondary to that. When you apply for credit, you give that business any permission needed. "Dictionary clarifies http://www.oxforddictionaries.com/definition/english/be-in-credit Definition of be in credit:   (Of an account) have money in it:   ""your statement shows your account to be in credit"" And http://www.oxforddictionaries.com/definition/english/be-in-debit?q=in+debit Definition of be in debit:   (Of an account) show a net balance of money owed to others: ""the account is only 120 francs in debit""  The word 'debit' contains the letters 'debt' if it helps remember. I agree the website is confusing." Creditworthiness is proven over time. The longer your track record of making payments on time, the more probable you will stick to credit agreements in future (or so the reasoning goes). Conversely, someone who has only just started applying for credit could be someone whose finances were previously stable but have now started to get into difficulty. Obviously this is not necessarily the case but it is one possible inference. This inference is strengthened when same person applies for further credit in a short space of time.  Ultimately, what is considered positive is a stable credit record over a reasonable period of time, because it indicates you stick to payment schedules and don't suddenly need credit due to money problems. Credit card accounts are considered a good indicator of credit status because they imply what kind of borrower you are. Whereas many credit arrangements present a straightforward case of arrears / no arrears (e.g. think of a mobile phone account – either you pay your bill or you don't), with credit cards there is an element of flexibility in how much you borrow, and how much of that you repay. If you run up four figure monthly balances but clear them in full each month without fail, that is a good sign. If your average balance is increasing and you are paying on time but just the minimum amount, that is a potential flag. In other words, credit cards are of particular interest because they paint a more nuanced picture. Provided you use one responsibly, getting and using a credit card may improve your status with credit reference agencies. "The credit and debit terms here is, talking from bank's point of view (shouldn't be a surprise, banks are never known to look at things from the customers' POV ;)).  In accounting, a liability (loans, owners capital etc) is a credit balance and asset (cash, buildings and such) is a debit balance.  Your account is a liability to the bank (in accounting parlance that is because they owe you every single penny that is there in your account, btw, in literal parlance too if you really make their life harder ;))  So when the bank accepts money from you, they need to increase their asset (cash) which they will debit (higher debit balance for asset means more assets), and at the same time they also have to account for the added liability by ""crediting"" the deposited money into your account. So when bank says they have credited your account, it means you have more money in your account. Now, if you transfer money from your account to another, or make a payment through your account, your account will be debited and the beneficiary account will be credited(bank's liability towards you reduces) More or less what everyone else said here... but hey, I could also take a swipe at banks ;))" Assuming that a person has good financial discipline and is generally responsible with spending, I think that having a few hundred or thousand dollars extra of available credit is usually worth more to that person for the choice/flexibility it provides in unforeseen circumstance, versus the relatively minor hit that could be taken to their credit score. "It's almost certainly the money you've earned from the bank. Money the bank earned from you would normally be described as ""Interest charged"" or ""Interest payable""." "I'm afraid the great myth of limited liability companies is that all such vehicles have instant access to credit.  Limited liability on a company with few physical assets to underwrite the loan, or with insufficient revenue, will usually mean that the owners (or others) will be asked to stand surety on any credit. However, there is a particular form of ""credit"" available to businesses on terms with their clients.  It is called factoring. Factoring is a financial transaction   whereby a business sells its accounts   receivable (i.e., invoices) to a third   party (called a factor) at a discount   in exchange for immediate money with   which to finance continued business.   Factoring differs from a bank loan in   three main ways. First, the emphasis   is on the value of the receivables   (essentially a financial asset), not   the firm’s credit worthiness.   Secondly, factoring is not a loan – it   is the purchase of a financial asset   (the receivable). Finally, a bank loan   involves two parties whereas factoring   involves three. Recognise that this can be quite expensive.  Most banks catering to small businesses will offer some form of factoring service, or will know of services that offer it.  It isn't that different from cheque encashment services (pay-day services) where you offer a discount on future income for money now. An alternative is simply to ask his clients if they'll pay him faster if he offers a discount (since either of interest payments or factoring would reduce profitability anyway)."