Credit and Debt

credit & debt

Credit – What does it mean?

The word credit can mean some slightly different things, depending on the way it is used. For example, if your bank account is ”in credit”, that means that there is money which is available for to you to spend.

A ”credit” to your account means money that is going into it.

However credit can also be another world for borrowing money. When you borrow money for example as a bank loan, you will be asked to sign a credit agreement. The word ”credit” then means the money you are borrowing from the bank.

Nearly everyone borrows money at some time in their life, and it is not a problem as long as you can afford to pay back the amount you borrowed over the agreed period of time.


Debt – What does it mean?

Debt means either that you have borrowed money (for example a bank loan), or not paid for something you had to pay for (for example rent) and you cannot pay it back.

One of the best reasons for working out your budget is that if you know how much money you have and where it goes, you are less likely to get into debt in the first place. If you do get into debt, working out your budget will help to stop it getting worse.

If you’re in debt, you need to take action quickly to stop the situation getting any worse.

If you have a problem with debt, it’s important not to panic but don’t ignore it either – it won’t go away and debts never get better if you ignore them, they usually get much worse.


If I have debt what should I do?

To deal with a debt problem, you will need to:

  • sort out how much money you owe

Make a list.

  • work out which are the most urgent debts for you to pay off

Debts are classed as either priority (important) or non-priority (less important) debts. The difference between them is not based on how much you owe, but what will happen to you if you don’t pay them.

For example, rent for where you live is always a priority debt, because if you don’t pay it the landlord can get a court order to have you removed from the house and you could be homeless.


If you are in debt or you are worried you may get into debt in the future it might be a good idea to attend an advice drop-in session. The Advice Team can help you manage your debts and understand which debts are priority and non-priority; this is a free, confidential and impartial service. The advice drop-in happens every Monday, Wednesday and Thursday between 12pm-1:30pm in the Student Support Centre.