Credit Basics
Foundational Canadian credit terms such as consumer credit, borrower and lender roles, credit files, credit history, and core borrowing structures.
Credit Basics explains the first concepts readers need before a credit report or score means anything. This section defines the building blocks of Canadian consumer credit, including what consumer credit covers, who the borrower and lender are, what a creditor is, how a credit file develops, and how revolving and installment borrowing differ.
It is the right starting point when a reader is new to Canadian credit, has never reviewed a bureau file before, or keeps seeing the same words across cards, loans, and score discussions without knowing how they connect.
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In this section
- Consumer Credit
Consumer credit is borrowing used for personal, family, or household purposes rather than business purposes.
- Borrower
A borrower is the person who applies for or uses credit and is expected to repay what is owed under the account terms.
- Lender
A lender is the institution or company that provides credit and expects repayment under the agreed account terms.
- Creditor
A creditor is the party to whom money is owed on a credit obligation.
- Credit History
Credit history is the running record of how a borrower has used and repaid credit over time.
- Credit File
A credit file is the bureau record that gathers a consumer's reported credit information.
- Revolving Credit
Revolving credit is borrowing with a reusable limit that can be spent, repaid, and used again.
- Installment Credit
Installment credit is borrowing where a defined amount is repaid through scheduled payments over time.
- Credit Limit
A credit limit is the maximum amount a borrower is approved to use on a revolving credit account.
- Available Credit
Available credit is the unused portion of a revolving credit limit that remains available to borrow.