What is " Line of Credit " | Effects on Credit ?

A line of credit is a preset amount of money that a financial institution like a bank or credit union has agreed to lend you. You can draw from the line of credit when you need it, up to the maximum amount. You’ll pay interest on the amount you borrow.

A line of credit is a credit facility extended by a bank or other financial institution to a government, business or individual customer that enables the customer to draw on the facility when the customer needs funds. A line of credit takes several forms, such as an overdraft limit, demand loan, special purpose, export packing credit, term loan, discounting, purchase of commercial bills, traditional revolving credit card account, etc. It is effectively a source of funds that can readily be tapped at the borrower's discretion. Interest is paid only on money actually withdrawn. Lines of credit can be secured by collateral, or may be unsecured.(Wikipedia)
When a number of buyers are located in the same country, instead of extending credit to different buyers, line of credit is extended to a financial institution located in the buyer's country by the financial institution from seller's country. The advantage is that the responsibility in judging the creditworthiness of different buyers and recovery from them is shifted to that financial institution located in buyer's country. In this process, the financial institution extending line of credit, in the exporter's country, becomes totally free from the worries connected with identifying the buyers, in importer's country, and recovering from them.