credit rating

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Related to credit ratings: Credit scores, Credit Ratings Agencies

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 ?
AM Best has affirmed the Long-Term Issue Credit Rating of bb on Fidelis Insurance Holdings Limited's preference shares.
This press release relates to Credit Ratings that have been published on AM Best's website.
In 2014, Moody's gave the Philippines a credit rating of 'Baa2' with a stable outlook.
The ambitious infrastructure program coupled with comprehensive tax reform being pursued by the Duterte administration have allowed debt watcher Japan Credit Rating Agency (JCR) to upgrade its credit outlook for the Philippines, increasing the likelihood for a rating upgrade in the near future.
Second, a credit rating downgrade will mean more expensive loans for the country.
In addition to S&P Global Rating recent affirmation, Moody's Investor Services has revised their outlook on the Bank to "Positive" from "Stable" and affirmed its issuer credit rating at "A3" in May 2018.
S&P Global Ratings has raised its outlook on government-owned Development Bank of the Philippines (DBP) from "stable" to "positive" following its similar action on the sovereign credit rating which was affirmed at "BBB/A-2" on Thursday.
, it's not clear sometimes who is more powerful." This paper investigates role of sovereign credit rating and country risk in relation with Pakistan's government bond yield.
Similarly, credit ratings may also be assigned to a specific debt obligation, which would provide an opinion about the credit quality of that debt issue alone.
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.
Many of these bonds have credit ratings to enhance marketability and lower interest rates.