credit rating

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Credit rating

An evaluation of an individual's or company's ability to repay obligations or its likelihood of not defaulting See: Creditworthiness.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Credit Rating

1. See: Bond rating.

2. See: FICO score.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

credit rating

A grading of a borrower's ability to meet financial obligations in a timely manner. Credit ratings are set by lenders and by independent agents for companies, individuals, and specific debt issues. See also bond rating.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Credit rating.

Your credit rating is an independent statistical evaluation of your ability to repay debt based on your borrowing and repayment history.

If you always pay your bills on time, you are more likely to have good credit and therefore may receive favorable terms on a loan or credit card, such as relatively low finance charges.

If your credit rating is poor because you have paid bills late or have defaulted on a loan, you may be offered less favorable terms or may be denied credit altogether.

A corporation's credit rating is an assessment of whether it will be able to meet its obligations to bond holders and other investors. Credit rating systems for corporations generally range from AAA or Aaa at the high end to D (for default) at the low end.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

credit rating

an assessment of the creditworthiness of a firm or an individual, which indicates the amount of CREDIT they can reasonably be allowed by a supplier.

The creditworthiness of a company can often be assessed on the basis of information derived from the company's past annual report and accounts, and from confidential details provided by the company's bank. Additionally, there are a number of specialized credit rating companies, such as Dunn and Bradstreet in the UK, who provide information about the creditworthiness of companies in return for a fee.

The creditworthiness of individual customers is more difficult to assess and is often based on some hard information such as court bankruptcy proceedings and default information on hire purchase agreements, together with circumstantial information such as the postal areas in which a potential debtor lives (indicating a suburb or inner city estate, for example). Firms specialize in collecting and processing such data and provide credit ratings in return for a fee. Under the terms of the UK CONSUMER CREDIT ACT, an individual has a right to inspect any credit record kept about them by such a firm.

Suppliers use credit ratings as a means of determining the maximum amount of credit to allow a customer as part of their CREDIT CONTROL procedures.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson
References in periodicals archive ?
Caption: The NewsGuard ratings systems gives news sites a green rating if it's trustworthy and a red rating if its Not.
The new ratings system, which was enforced as from January 1, was in implementation of a Cabinet decision issued in July last year.
The agency expects to publish the college ratings system before the 2015-16 school year and will continue to refine the ratings system over time based on user and institutional experience, input from the field, and the availability of additional data.
"I do not think community colleges should be included in the ratings system because they have an incomparable mission that will be harmed by the ratings," said Sara Goldrick-Rab, a leading scholar on community colleges and professor of educational policy studies and sociology at the University of Wisconsin-Madison.
Similar ratings systems have been established in Europe, and the UNECE has developed a policy framework that outlines critical elements of the system.
Vaizey added that "simplification of the ratings system benefits both industry and consumers and will help ensure that the millions of games sold in the UK each year are being played by the audiences they were intended for."
The ratings system will also look at the quality of staff and accommodation.
"There is no notion of a supervisor imposing an internal ratings system on a bank that doesn't need it," McDonough said flatly.
But will the television ratings system implemented on January 1 send us back to the prime-time closet?
I, too, have problems with the proposed ratings system: It doesn't cover enough.
America's media leaders favor a ratings system for television content that includes network and cable entertainment programs.
Since no one in the entertainment software community seems even vaguely upset by the newly-formed Recreational Software Advisory Council, we hesitate to suggest that the RSAC's self-censorship process--a/k/a an "independent game ratings system"--is probably one of the worst things that could happen to entertainment software.