A credit reference is information, the name of an individual, or the name of an organization that can provide details about an individual's past track record with credit.
Other letters of credit reference might be written by banks, which would provide basic information about how long the applicant has held an account, what type of account it was, and whether there were any overdrafts or late payments noted.
For example, if an applicant's credit history indicates proper, timely payments on all outstanding obligations, a lender may judge it more likely that the applicant will make timely payments on the requested loan.
Whether the credit reference is a good one depends on if the payments have been made on time or not.
The credit limit and payment history in the credit references give other potential creditors an idea on whether an individual will make payments on time or default.