Credit document – What is it, definition and concept | 2022

A credit document is a contract that reflects an agreement that recognizes an obligation between two or more parties.

This type of document can be made even between individuals, so there may be the case in which two parties acknowledge a debt that exists between them in writing, without the need for there to be a commercial interest.

That is to say, in this type of document there must be at least two participants, in which the role of drawer and taker are shared. In addition, a fundamental actor must also be given so that the document itself can be given: a bank or financial entity.

For this reason, it is important, in addition to the reliability of the participants, the entity that manages the agreement since it is key in the fulfillment of the contract.

Function and characteristics of a credit document

The main function of a credit document lies in the mutual recognition that there is a future collection right in the form of an obligation or commitment between the parties.

On the other hand, as has been mentioned above, a credit document is made up of the two or more possible parties that participate in the agreement, and the intermediary entity:


However, and as in most products that can be sold on the market, a credit document can also be transferred to another person or entity.

In other words, if we have in our possession a credit document that we can execute in our favor within a period of 3 years, but it suits us better (for example) next month, we can sell that document in exchange for an amount less than what would belong to us after the aforementioned period of 3 years.

This new actor who buys the document from us is called the ‘holder’. This intervener has practically the same status as the ‘taker’, with the only exception that he is not the one who appears in the initial document.

Types of credit documents

Some of the most common credit documents are:

  • Check. It is one of the most popular documents in transactions between individuals and small businesses. It is often used instead of cash. Checks can be of various types, and based on these, the taker will have a series of rights or others.
  • I’ll pay. In this case, the credit document indicates a medium or long-term obligation, which is similar to a public bond, but issued by a company.
  • Bill of exchange. It is a document that recognizes an obligation between the parties, but in the short term. Its counterpart in the public sector would be the so-called ‘treasury bills’, which are issued by the State.

Although it is true that each one has a series of factors that make each of them a different way of issuing a credit document, the basic operation remains the same.

Example of credit document

To highlight the operation of a credit document, a simple example will be presented below:

Given the case in which two people on their own account (self-employed) agree to attest to a debt that exists between them, they decide to reflect this in a document.

In this case, we have on the one hand Juan (autonomous 1), who received money borrowed from María (autonomous 2). María lent the amount of €6,000 to Juan, who must repay this amount at a fixed interest rate of 3% within 2 years. Therefore, in order to declare this fact to the treasury, they decide to put their agreement in writing and declare it.

Thus, in the case of Juan, in his personal accounting this amount that they have lent him will appear as a liability, and Maria, as an asset.

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