credit rating
Sign in to saveevaluation of the credit risk of a prospective debtor, predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting
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- Credit rating
- topic's main category
- Category:Credit scoring
- has cause
- risk assessment
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Encyclopedic overview
A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government). It is the practice of predicting or forecasting the ability of a supposed debtor to pay back the debt or default. The credit rating represents an evaluation from a credit rating agency of the qualitative and quantitative information for the prospective debtor, including information provided by the prospective debtor and other non-public information obtained by the credit rating agency's analysts.
Credit reporting (or credit score) is a subset of credit rating. It is a numeric evaluation of an individual's credit worthiness, which is done by a credit bureau or consumer credit reporting agency.
Excerpted from Wikipedia’s “credit rating” article, available under the CC BY-SA 4.0 licence.