<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:  September 30, 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 October 31, 1997
Common Stock                                            2,000

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



                                      THIS DOCUMENT CONSISTS OF 13 PAGES






(1)

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To the extent that this Form 10-Q Report contains forward-looking statements 
and information relating to the Registrant, such statements are based on the 
beliefs of management as well as assumptions made by and information 
currently available to management.  The words "anticipate," "believe," 
"estimate," "expect," "intends" and similar expressions, as they relate to 
the Registrant or the Registrant's management, are intended to identify 
forward-looking statements.  Such statements reflect the current views of the 
Registrant with respect to future events and are subject to certain risks, 
uncertainties and assumptions.  Should one or more of these risks or 
uncertainties materialize, or should underlying assumptions prove incorrect, 
actual results may vary materially from those described herein as 
anticipated, believed, estimated or expected.  The Registrant does not intend 
to update these forward-looking statements.


















































(2)
<PAGE>
PART 1.   FINANCIAL INFORMATION
Item 1.   Financial Statements


                           XEROX CREDIT CORPORATION
                      CONSOLIDATED STATEMENTS OF INCOME
                               (In Millions)


                                       Three Months Ended   Nine Months Ended
                                          September 30,        September 30,

                                          1997     1996        1997     1996
Earned income:

   Contracts and notes receivable       $   85   $   83      $  263   $  256

Expenses:

   Interest                                 54       49         162      152
   Operating and administrative              2        3           8       10

      Total expenses                        56       52         170      162

Income before income taxes                  29       31          93       94

Provision for income taxes                  12       13          38       38


Net income                              $   17   $   18      $   55   $   56


See accompanying notes.































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<PAGE>
                           XEROX CREDIT CORPORATION
                          CONSOLIDATED BALANCE SHEETS
                                 (In Millions)

                                     ASSETS
                                                  September 30,  December 31,
                                                          1997          1996

Cash and cash equivalents                              $     -       $     -

Investments:
    Contracts receivable                                 4,499         4,272
    Notes receivable - Xerox and affiliates                 56           130
    Unearned income                                       (580)         (534)
    Allowance for losses                                  (116)         (123)
        Total investments                                3,859         3,745

Net assets of discontinued operations                       91           152
Deferred income taxes and other assets                       2             2

        Total assets                                   $ 3,952       $ 3,899


                      LIABILITIES AND SHAREHOLDER'S EQUITY

Liabilities:
    Notes payable within one year:
      Commercial paper                                 $ 1,446       $ 1,126
      Current portion of notes payable after one year      691           886
      Notes payable - Xerox and affiliates                   -            20
    Notes payable after one year                         1,215         1,238
    Notes payable after one year-Xerox and affiliates        -            75
    Due to Xerox Corporation, net                           44            16
    Accounts payable and accrued liabilities                37            31
    Deferred income taxes                                   29            31

        Total liabilities                                3,462         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                                      248           234

        Total shareholder's equity                         490           476

        Total liabilities and shareholder's equity     $ 3,952       $ 3,899
           



See accompanying notes.












(4)
<PAGE>
                              XEROX CREDIT CORPORATION
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In Millions)

                                                           Nine Months Ended
                                                              September 30,
                                                             1997      1996
Cash Flows from Operating Activities
  Net income                                               $   55    $   56
  Adjustments to reconcile net income to net cash
    provided by operating activities:

    Net change in operating assets and liabilities             11        40
 
Net cash provided by operating activities                      66        96

Cash Flows from Investing Activities
  Purchases of investments                                 (1,501)   (1,364)
  Proceeds from investments                                 1,313     1,338
  Net collections from discontinued operations                 61        22
 
Net cash used in investing activities                        (127)       (4)

Cash Flows from Financing Activities
  Change in commercial paper, net                             320       155
  Proceeds from long-term debt                                648       600
  Principal payments on long-term debt                       (866)     (786)
  Dividends                                                   (41)      (61)

Net cash provided by (used in) financing activities            61       (92)


  Increase in cash and cash equivalents                         -         -

  Cash and cash equivalents, beginning of period                -         -

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










See accompanying notes.
















(5)
<PAGE>
                           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.

(2)  During the first nine months of 1997, the Company redeemed the
     following notes (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 ("VRNs")               580
     Total debt redeemed at maturity            711

     Redeemed prior to maturity                 155

       
     Total debt redeemed                       $866

(3)  During the first nine months of 1997, the Company sold a total of
     $648 million of medium-term notes.  Of this amount, $50 million are
     fixed-rate notes which mature in 1998, $148 million are Eurodollar
     medium-term notes maturing in 2000, $250 million are cash exchangeable
     equity-linked notes maturing in 2002, $25 million are fixed-rate notes
     maturing in 2007, and $175 million are fixed- and adjustable-rate notes
     maturing in 2012.  The interest rates on all of this debt have been
     swapped into LIBOR-based rates.

(4)  On October 6 and on October 29, 1997, the Company issued $25 million
     each of 7.0% notes due 2012.  Also, on October 7, 1997, the Company
     issued, at a premium, $25 million of 15.0% notes due 1998.  Interest
     obligations on all of these transactions have been swapped to LIBOR-
     based rates.

(5)  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.







(6)

<PAGE>



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 for the third quarter 
of 1997 was $85 million versus $83 million in the corresponding period in 
1996, and $263 million and $256 million for the nine-month periods ended 
September 30, 1997 and 1996, respectively.  The increase in earned income 
resulted from a higher average contracts receivable portfolio in 1997 
partially offset by a lower average interest rate.  

      Third quarter interest expense increased to $54 million in 1997 from 
$49 million in the same period in 1996.  For the nine-month period ended 
September 30, 1997, interest expense increased to $162 million from $152 
million in 1996.   These increases are principally attributable to higher 
debt balances related to a larger contracts receivable portfolio in 1997.

      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 process is employed because it 
effectively "locks in" a spread and eliminates the risk of shrinking interest 
margins when interest rates rise.  Conversely, this practice effectively 
eliminates the opportunity to increase margins when interest rates decline.  
The Company intends to continue to match its contracts receivable and 
indebtedness in order to ensure an adequate spread between interest income 
and interest expense.

      Operating and administrative expenses were $2 million and $3 million 
for the third quarter of 1997 and 1996, respectively. For the nine-month 
periods ended September 30, 1997 and 1996, operating and administrative 
expenses totaled $8 million and $10 million, respectively.  These expenses 
are incurred primarily to administer the contracts receivable purchased from 
Xerox.  The decrease is attributable mainly to improvements in systems 
processing and other productivity measures that have occurred during the 
year.

      The effective income tax rate for the first nine months of 1997 and 
1996 was 40.9 percent and 40.4 percent, respectively.












(7)
<PAGE>
                           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 September 30, 1997, the Company received net cash 
proceeds of $2,537 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 short-term indebtedness.

      During the first nine months of 1997, the Company reduced net assets of 
discontinued operations by approximately $61 million, primarily through 
contractual maturities and cash sales.

      Since a significant portion of the remaining $91 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 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 $66 million in the first 
nine months of 1997, compared to $96 million provided by operating activities 
during the same period in 1996.  The decrease is primarily due to a change in 
the timing of intercompany settlements.

      Net cash used in investing activities was $127 million during the first 
nine months of 1997, compared with $4 million used during the same period in 
1996.  The change primarily resulted from increased net purchases of 
contracts receivable from Xerox in the first nine months of 1997 over the 
first nine months of 1996.

      Net cash provided by financing activities was $61 million in the first 
nine months of 1997 compared to $92 million of usage in the first nine months 
of 1996.  Cash provided by financing has grown due to a higher level of 
contract purchases from Xerox and the year-end 1996 change in the Company's 
leverage guideline from 6.5 to 1 to 7.0 to 1.

      At September 30, 1997, the Company had registered domestic shelf debt 
capacity of $2 billion, of which $1,950 million remained unused.  In 
addition, a $2 billion Euro-debt facility is available to Xerox, Xerox 
Capital (Europe) Plc and the Company, of which $1,219 million remained unused 
at September 30, 1997.

      In October 1997, the Company and Xerox replaced the then-existing $5 
billion revolving credit agreement with a $7 billion revolving credit 
agreement maturing in 2002.  This new Revolver is also accessible (up to a $4 
billion limit) by Xerox Capital (Europe) Plc and Xerox Overseas Holdings PLC.  
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.








(8)
<PAGE>
      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 manage its outstanding commercial paper, 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 nine months of 1997, the Company entered into interest 
rate swap agreements which effectively converted $1,023 million of variable-
rate debt into fixed-rate debt.  These agreements mature at various dates 
through 2002 and result in a weighted average fixed-rate of interest of 6.34 
percent.  The Company also entered into interest rate swap agreements during 
the first nine months of 1997 which effectively converted $648 million of 
fixed- and adjustable-rate debt into variable-rate debt indexed to LIBOR 
rates.   These agreements mature in 1998, 2000, 2002, 2007 and in 2012. The 
agreements which mature in 2007 and 2012 are cancelable by the respective 
counterparties on interest payment dates beginning in 1999 and 2001. 
Cancellation dates within the swap agreements conform to the exercise dates 
of call options embedded in the Company's fixed- and adjustable-rate debt.

      As of September 30, 1997, the Company's overall debt-to-equity ratio 
was 6.84 to 1. The Company's 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.






























(9)
<PAGE>
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.

                               Incorporated by reference to Exhibit 3 (b)
                               to Registrant's Quarterly Report
                               for the Quarter ended March 31, 1997.

                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




























(10)

<PAGE>






                              SIGNATURE


      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:  /s/  George R. Roth

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

                             November 12, 1997







































(11)