credit rating

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Related to credit rating: Credit score, Credit report

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 ?
In May, the Philippines received its highest credit rating from a major ratings agency to date, as SandP Global Ratings announced that it is assigning a 'BBB+' rating on the country's long-term sovereign credit rating.
In another 2014 study by Ruud Meeuwissen of Tilburg University in the Netherlands, he showed the impact of the sovereign credit rating on domestic loan supply in emerging markets like the Philippines.
According to the ministry, the executives of the credit rating agencies recognized the lessening geopolitical tension, and added they will monitor the outcomes of North Korea's summits with the South as well as the United States, to see if there are any meaningful achievements.
As Moody's sovereign risk reports suggested the Pakistan risk reduced and sovereign credit rating improved; it would be a green signal for Pakistani Community to invest in bonds.
Therefore, on a larger spectrum, credit rating regulations will complement the recently approved bankruptcy laws in enhancing the economic efficiency of UAE.
According to economists, Fitch's decision was expected in the light of the revision of Macedonia's credit rating. Analysts say there could be worse consequences with long-term effects.
Further, the credit rating company was warned to comply with the regulatory framework and code of conduct in letter and spirit in future, said a press statement issued here.
The amendments eliminate the following two requirements in the money market fund Rule 2a-7: Money market funds must invest only in securities that have received one of the two highest short-term credit ratings or, if they are not rated, securities that are of comparable quality; and the requirement that a money market fund invest at least 97% of its assets in securities that have received the highest short-term credit rating.
A few years later, the Credit Rating Agency Reform Act of 2006 provided the SEC with statutory authority to regulate credit ratings firms and required the SEC to clarify the guidelines for obtaining the NRSRO designation.
Sources for this credit information on the S&P Capital IQ desktop include CRISIL Ratings, a division of McGraw Hill Financial (India), Japan Credit Rating Agency (Japan), NICE Investors Services Co., Ltd(S.
24, 2012, in Beijing, UCRG defined its mission as one that promotes reform of the international credit rating system, develops new international credit rating criteria to reflect laws that govern the development of credit-based economy and represent common interests, establishes independent international supervision for credit ratings and disseminates impartial rating information for the world.