Fictitious Credit Law and Legal Definition
Fictitious credit is a credit balance in a securities margin account. Fictitious credit exists after the proceeds from a short sale are accounted for with respect to the margin requirement.
It also refers to an indorsement on a promissory note, made without the authority of the maker or any indorser, of credit for a payment not made. Such an indorsement is sometimes made by payee or indorsee for the purpose of tolling the statute of limitations.
