A credit system is a way for individuals and businesses to borrow money or access services based on their creditworthiness. This system evaluates a person's or company's financial history, including their ability to repay loans. Factors like payment history, outstanding debts, and credit utilization help determine a credit score, which lenders use to decide whether to approve a loan or credit application. In many countries, credit systems are managed by organizations known as credit bureaus. These bureaus collect and maintain information about borrowers, allowing lenders to make informed decisions. A good credit score can lead to lower interest rates and better loan terms, while a poor score may result in higher costs or loan denial.