This is when you pay less upfront and, in exchange, receive money from your lender at closing to help you cover costs and fees. This, in turn, makes the interest rate on your loan higher.
For example, if you are considering a $200,000 loan amount and see one interest rate has a 0.250 credit, that would be $200,000 multiplied by 0.0025, equaling a $500 reduction in your closing costs.