Consumer credit refers to the borrowing of funds by individuals to purchase goods and services. This type of credit allows consumers to buy items they may not be able to afford upfront, such as cars, appliances, or furniture. Common forms of consumer credit include credit cards, personal loans, and installment loans. Lenders assess a borrower's creditworthiness, often using a credit score, to determine the terms of the loan, including interest rates and repayment periods. Responsible use of consumer credit can help build a positive credit history, while mismanagement can lead to debt and financial difficulties.