Why does credit exist?

Are you asking why people can borrow money or why we have credit scores?

The idea of borrowing money and paying a fee to do so has been around since biblical times or perhaps before and we have this thing called credit so we may purchase things we do not have the ability to buy with cash. One good example is a house. Most people can not pay $200,000 cash for a home and it would take them many years to save that much (especially if they had to rent while saving the money), so they borrow a portion of it (like $165,000) and live in the house while they pay off the loan.

Credit scores are designed to help lenders determine if you have the ability to and if you actually will pay back a loan or not. The scores comes from things like your financial history. Paying things on time and not missing payments will help your score.