A line of credit is simply credit provided by some sort of financial institution to an external entity like people or businesses. In fact this can also include the government. In its simplest explanation a line of credit is like a bank account that can easily be accessed by the person who is borrowing the money. The money that is taken out is charged interest during repayment. You can ether have a secured or unsecured line of credit. To secure a line it usually has to be backed with some kind of collateral.