Credit Control area is used for controlling the credit exposure of the company to a different operations with our partners. A prerequisite for defining a credit control area is the fiscal year variant which should be created or maintained already. One Credit Control Area could be assigned to several company codes. You could set credit limits on individual customers as well as based on whole market on which the company is operating.
IMG Path: Enterprise Structure -> Definition -> Financial Accounting -> Define Credit Control Area
When you open the transaction you should hit “New Entries”.
On the following screen fill the necessary fields according to your requirements. In this case I named my Credit Control Area the same as my Company Code.