| 1. | the possibility of loss if a borrower defaults on a loan. |
| 2. | a borrower regarded as likely to default on a loan. |
Credit Risk
The possibility of a loss occurring due to the financial failure to meet contractual debt obligations.
Investopedia Commentary
This is one of the measurements of the likelihood that a party will default on a financial agreement.
See also: Bond Rating, Credit Cliff, Debt, Default risk, Settlement Risk
credit risk