Even utility payments are a credit transaction because you use the utilities services before paying for them. Since credit is so prevalent in all our lives, it is vital that we maintain a good credit rating if we want our lives to ran smoothly. While it is possible to live with no credit or even bad credit, it severely limits your options in today's society. To get credit, you must make an application to a lender for credit. This information is analyzed by the creditor and if it is deemed positive, you are granted the credit you requested.
Secured credit means that the loan is secured by the merchandise purchased with that loan.
For example, if you buy a car, that is a secured credit transaction because the lender can repossess the car if you do not repay the loan in a timely manner. Even credit card purchases are secured. This is because the credit card issuer can legally take back the merchandise you purchased if you default on the payments. But this is very rarely done for credit cards. The credit cud issuer doesn't want books and TVs, not to mention the meals and gas, etc.