A credit line is a flexible loan from a financial institution that allows individuals or businesses to borrow money up to a specified limit. This means you can withdraw funds as needed, rather than taking a lump sum. Interest is typically charged only on the amount borrowed, making it a useful option for managing cash flow or unexpected expenses. There are different types of credit lines, including personal lines of credit and business lines of credit. They can be secured, requiring collateral, or unsecured, which do not require any assets. Proper management of a credit line can help improve your credit score.