<PAGE>
                                  FORM 10-Q
                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

(Mark One)
( X )     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

          For the quarterly period ended:  March 31, 1997
                                      OR
(   )     Transition Report Pursuant to Section 13 or 15(d) of the Securities
          Exchange Act of 1934
          For the transition period from :                 to

Commission file number:  1-8133

                           XEROX CREDIT CORPORATION
            (Exact name of Registrant as specified in its charter)
Delaware                                                           06-1024525
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification No.)

100 First Stamford Place, Stamford, Connecticut                         06904
(Address of principal executive offices)                           (Zip Code)

                                (203) 325-6600
             (Registrant's telephone number, including area code)

      Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class                 Name of Each Exchange on Which Registered

10% Notes due 1999                  New York Stock Exchange


      Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark whether the Registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
Registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.     Yes:     X         No:

Indicate the number of shares outstanding of each of the issuer's classes of 
common stock, as of the close of the latest practicable date.

   Class                                  Outstanding as of April 30, 1997
Common Stock                                            2,000

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS J(1)(a) 
AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED 
DISCLOSURE FORMAT.



                                      THIS DOCUMENT CONSISTS OF 22 PAGES







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PART 1.   FINANCIAL INFORMATION
Item 1.   Financial Statements


                           XEROX CREDIT CORPORATION
                      CONSOLIDATED STATEMENTS OF INCOME

                                (In Millions)


                                                           Three Months Ended
                                                                 March 31,
                                                              1997     1996
Earned income:

   Contracts and notes receivable                           $   88   $   88

Expenses:

   Interest                                                     53       52
   Operating and administrative                                  3       _4

      Total expenses                                            56       56

Income before income taxes                                      32       32

Provision for income taxes                                      13       13


Net income                                                  $   19   $   19


See accompanying notes.
































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                           XEROX CREDIT CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                                 (In Millions)

                                     ASSETS
                                                      March 31,  December 31,
                                                          1997          1996

Cash and cash equivalents                              $     -       $     -

Investments:
    Contracts receivable                                 4,385         4,272
    Notes receivable - Xerox and affiliates                130           130
    Unearned income                                       (562)         (534)
    Allowance for losses                                 _(118)         (123)
        Total investments                                3,835         3,745

Net assets of discontinued operations                      125           152
Deferred income taxes and other assets                       1             2

        Total assets                                   $ 3,961       $ 3,899


                      LIABILITIES AND SHAREHOLDER'S EQUITY

Liabilities:
    Notes payable within one year:
      Commercial paper                                 $ 1,339      $  1,126
      Current portion of notes payable                     621           886
    Notes payable after one year                         1,338         1,238
    Notes payable after one year - Xerox and affiliates     75            75
    Due to Xerox Corporation, net                           36            36
    Accounts payable and accrued liabilities                44            31
    Deferred income taxes                                ___29         ___31

        Total liabilities                                3,482         3,423

Shareholder's Equity:
    Common stock, no par value, 2,000 shares
        authorized, issued, and outstanding                 23            23
    Additional paid-in capital                             219           219
    Retained earnings                                      237           234

        Total shareholder's equity                         479           476

        Total liabilities and shareholder's equity     $ 3,961       $ 3,899
           



See accompanying notes.












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                              XEROX CREDIT CORPORATION
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                     
                                   (In Millions)

                                                           Three Months Ended
                                                                March 31,
                                                             1997      1996
Cash Flows from Operating Activities
  Net income                                               $   19    $   19
  Adjustments to reconcile net income to net cash
    provided by operating activities:

    Net change in operating assets and liabilities             12        67
 
Net cash provided by operating activities                      31        86

Cash Flows from Investing Activities
  Purchases of investments                                   (521)     (544)
  Proceeds from investments                                   431       484
  Net collections from discontinued operations              _  27     _  10
 
Net cash used in investing activities                       _ (63)    _ (50)

Cash Flows from Financing Activities
  Change in commercial paper, net                             213       571
  Proceeds from long-term debt                                100         -
  Principal payments on long-term debt                       (265)     (585)
  Dividends                                                 _ (16)      (22)

Net cash provided by (used in) financing activities         _  32     _ (36)


  Increase in cash and cash equivalents                         -         -

  Cash and cash equivalents, beginning of period                -         -

  Cash and cash equivalents, end of period                 $    -    $    -




See accompanying notes.





















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                           XEROX CREDIT CORPORATION
                  Notes to Consolidated Financial Statements


(1)  The consolidated financial statements presented herein have been
     prepared by Xerox Credit Corporation (the "Company") in accordance with
     the accounting policies described in its Annual Report on Form 10-K for
     the fiscal year ended December 31, 1996 and should be read in
     conjunction with the Notes to Consolidated Financial Statements which
     appear in that report.

     In the opinion of management, all adjustments (consisting only of normal
     recurring adjustments) which are necessary for a fair statement of the
     operating results for the interim periods presented have been made.

     Interim financial data presented herein are unaudited.

     Certain prior year balances have been reclassified to conform to the
     current year presentation.

(2)  During the first three months of 1997, the Company redeemed the 
following notes at maturity:

                                    (in millions)    
     5.69% Notes                      $  25
     5.76% Notes                         31
     5.79% Notes                         25
     5.81% Notes                         25
     5.82% Notes                         25
     Variable Rate Notes                130

     Total debt redeemed at maturity    261

     Note redeemed prior to maturity    __4

     Total Debt Redeemed               $265

     In addition, on April 4, 1997 the Company called, at par, $150 million
     of variable rate notes due in 2000.

(3)  During the first three months of 1997, the Company sold at various dates 
a total of $100 million of fixed- and adjustable-rate notes which mature 
at various dates in 2012 and are first callable in 1999 and 2001.  The 
interest rates on all of these notes have been swapped into Libor-based 
rates.

(4)  The terms of a Support Agreement with Xerox provide that the Company
     will receive from Xerox income maintenance payments, to the extent
     necessary, so that the Company's earnings shall not be less than 1.25 
     times its fixed charges.  For purposes of this calculation, both 
     earnings and fixed charges are as defined in Section 1404 (formerly 
     Section 81(2)) of the New York Insurance Law.  In addition, the 
     agreement requires that Xerox retain 100 percent ownership of the 
     Company's voting capital stock.









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Item 2. Management's Discussion and Analysis of Financial Condition and
            Results of Operations

RESULTS OF OPERATIONS
                           Continuing Operations

     Contracts receivable income represents income earned under an agreement 
with Xerox pursuant to which the Company purchases long-term accounts 
receivable associated with Xerox' sold equipment. These receivables arise 
primarily from Xerox equipment sold under installment sales and sales-type 
leases.

     Earned income from contracts and notes receivable was $88 million for 
the first three months of 1997 and 1996. The effect of higher average 
contract receivables was offset by a lower average interest rate.

     Interest expense increased to $53 million in the first quarter of 1997 
from $52 million in the same period in 1996.  The increase is due to a larger 
average portfolio of contracts receivable and a slight change to the 
Company's internal leverage guideline (see page 8), which  were largely 
offset by a lower average interest rate and lower discontinued operations net 
assets (see page 7).

     Since substantially all of the Company's contracts receivable earn fixed 
rates of interest, the Company "match funds" the contracts by swapping 
variable-rate commercial paper and medium term notes into fixed rates of 
interest for specified maturities.  This practice is employed because it 
effectively "locks in" a spread and eliminates the risk of shrinking interest 
margins in a rising interest rate environment.  Conversely, this practice 
effectively eliminates the opportunity to increase margins when interest 
rates are declining.  The Company intends to continue to match its contracts 
receivable and indebtedness to ensure an adequate spread between interest 
income and interest expense.

     Operating and administrative expenses were $3 million for the first 
quarter of 1997 compared to $4 million for the first quarter of 1996. These 
expenses are primarily the costs to administer the contracts receivable 
purchased from Xerox.

     The effective income tax rate for the first three months of 1997 and 
1996 was 40.6 percent.























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                           Discontinued Operations

      Since their discontinuance in 1990, the Company has made substantial 
progress in disengaging from the real estate and third-party financing 
businesses.  Through March 31, 1997, the Company has received net cash 
proceeds of $2,503 million from the sale of discontinued business units, 
asset securitizations, sales, and runoff collection activities.  The amounts 
received have been consistent with the Company's estimates in its disposal 
plan and were primarily used to reduce the Company's indebtedness.

      During the first quarter of 1997, the Company reduced its net assets of 
discontinued operations by $27 million, primarily through contractual 
maturities and cash sales.

      Since a significant portion of the remaining $125 million portfolio 
represents passive lease receivables, some with long-duration contractual 
maturities and unique tax attributes, the Company expects that the wind-down 
of the portfolio will continue to be a gradual process.  The Company believes 
that the liquidation of the remaining assets will not result in a net loss.



CAPITAL RESOURCES AND LIQUIDITY

      The Company's principal sources of funds are cash from the collection 
of Xerox contracts receivable and borrowings.

      Net cash provided by operating activities was $31 million in the first 
three months of 1997 compared to $86 million during the same period in 1996. 
The decrease was primarily due to lower intercompany receipts in the first 
quarter of 1997.

      Net cash used in investing activities was $63 million in the first 
three months of 1997 compared to $50 million in the first three months of 
1996.  The increase is due to lower year over year cash collections on 
contracts receivable, offset by lower purchases of contracts from Xerox and 
higher cash collections from the sale of discontinued assets.

      Net cash provided by financing activities was $32 million during the 
first three months of 1997 compared to $36 million used in financing 
activities during the same period in 1996. The change is primarily associated 
with the proceeds from the sale of fixed- and adjustable-rate notes in the 
first quarter of 1997.
 



















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     At March 31, 1997, the Company had domestic shelf capacity of $350 
million.  In addition, a $2 billion Euro-debt facility is available to the 
Company, Xerox, and Rank Xerox Capital (Europe) plc, of which $1.367 billion 
remained unused at March 31, 1997.

     The Company and Xerox have joint access to a $5 billion revolving credit 
agreement with various banks which expires in 2000.  Any amounts borrowed 
under this facility would be at rates based, at the borrower's option, on 
spreads above certain reference rates such as LIBOR and Federal Funds.

     The Company believes that cash provided by continuing operations, cash 
available under its commercial paper program supported by its credit 
facility, and its access to the capital markets are more than sufficient to 
ensure its funding needs will be met.  New borrowing associated with the 
financing of customer purchases of Xerox equipment will continue in 1997 and 
decisions regarding the size and timing of any new term debt financing will 
be made based on cash flows, match funding needs, refinancing requirements 
and capital market conditions.

     The Company intends to continue to match fund its contracts receivable.  
To assist in managing its interest rate exposure, the Company has entered 
into a number of interest rate swap agreements.  In general, the Company's 
objective is to hedge its variable-rate debt by paying fixed rates under the 
swap agreements while receiving variable-rate payments in return.  
Additionally, in order to match the duration of its assets, the Company 
opportunistically issues variable- and fixed-rate medium-term notes which are 
swapped to attractive commercial paper or LIBOR- based rates.

     During the first three months of 1997, the Company entered into interest 
rate swap agreements which effectively converted $339 million of variable-
rate debt into fixed-rate debt.  These agreements mature at various dates 
through 2002 and resulted in a weighted average fixed-rate of interest of 
6.25  percent.  The Company also entered into interest rate swap agreements 
during the first quarter 1997 which effectively converted $100 million of 
fixed- and adjustable-rate debt into variable-rate debt indexed to LIBOR 
rates.  These agreements mature at various dates in 2012 and all are 
cancelable by the respective counterparties on interest payment dates 
beginning in 1999 and 2001  These swaps were entered into to ensure that the 
Company is match funded.

     As of March 31, 1997, the Company's overall debt-to-equity ratio was 7.0 
to 1.  The Company's internal practice is to maintain a debt-to-equity ratio 
of approximately 7.0 to 1.  Prior to December 31, 1996, the Company's 
practice was to maintain a debt-to-equity ratio of approximately 6.5 to 1. 



















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PART II.  OTHER INFORMATION


Item 1.   Legal Proceedings

          None.


Item 6.   Exhibits and Reports on Form 8-K

          (a)   Exhibits

                Exhibit 3  (a) Articles of Incorporation of Registrant filed
                               with the Secretary of State of Delaware on 
                               June 23, 1980.

                               Incorporated by reference to Exhibit 3(a)
                               to Registration Statement No. 2-71503.

                           (b) By-Laws of Registrant, as amended through
                               September 1, 1992.



                Exhibit 12 (a) Computation of the Company's Ratio of Earnings
                               to Fixed Charges.

                           (b) Computation of Xerox' Ratio of Earnings
                               to Fixed Charges.

                Exhibit 27  Financial Data Schedule (Electronic Form Only)

          (b)   Reports on Form 8-K.

                None





























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      Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                             XEROX CREDIT CORPORATION




                             BY______________________

                             George R. Roth, Vice President,
                             Treasurer and Chief Financial Officer

                             May 12, 1997















































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