credit risk

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Credit risk

The risk that an issuer of debt securities or a borrower may default on its obligations, or that the payment may not be made on a negotiable instrument. Related: Default risk.

Default Risk

The risk that a debtor will be unable to pay back its loans. Default risk goes up if a debtor has large number of liabilities and poor cash flow. Generally speaking, companies and persons with high default risk stand a greater chance of a loan being denied and pay a higher interest rate on the loans they do receive. See also: Bankruptcy.

credit risk

The risk that a borrower will be unable to make payment of interest or principal in a timely manner.
References in periodicals archive ?
Under the Fair Credit Reporting Act, credit reports can be ordered for: insurance underwriting, credit transactions, hiring (with your written permission), license eligibility or for a legitimate business purpose, such as verifying the credit worthiness of a potential business partner.
Credit Worthiness -- In an economic recovery, lower-rated companies are better able to improve their credit worthiness.
Williams & Williams' ASAP provides an alternative--a way for borrowers to avoid loss of equity and credit worthiness, as well as help lenders avoid financial loss and keep foreclosed properties off their books.
The Real Estate Settlement Procedures Act, passed in 1974, was intended to help homebuyers fully understand the terms of their loans and to protect them against terms or practices that could cause them to lose money, credit worthiness or their homes.
One possible answer is that borrowers recognize that should they tarnish their credit worthiness with the lending agency, they have nowhere else to turn to for credit.
In a statement, Clinton applauded the ``bipartisan congressional vote to maintain the nation's credit worthiness and financial integrity.
The proposals address mostly the way real estate used as collateral appraised and how the credit worthiness of borrowers is evaluated.

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