| a classification of credit risk based on investigation of a customer's or potential customer's financial resources, prior payment pattern, and personal history or degree of personal responsibility for debts incurred. |
| credit rating n. An estimate of the amount of credit that can be extended to a company or person without undue risk. |
An evaluation of the financial trustworthiness of an individual, firm, or government.
Credit Rating
An assessment of the credit worthiness of individuals and corporations. It is based upon the history of borrowing and repayment, as well as the availability of assets and extent of liabilities.
Investopedia Commentary
Credit is important since individuals and corporations with poor credit will have difficulty finding financing, and will most likely have to pay more due to the risk of default.
Related Links
Bond Basics Tutorial
Corporate Bonds: An Introduction To Credit Risk
The Importance of Your Credit Rating
Insight Into Insurance Scoring
Credit, Debit And Charge: Sizing Up The Cards In Your Wallet
See also: Bond Rating, Credit Enhancement, Credit Risk, Default Risk, Impaired Credit, Insurance Score, Rating
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