Credit Rating Meaning and Definition

Pronunciation

(/ˈkrɛdɪt ˈreɪtɪŋ/) 🔊

Part of Speech

Noun

Definition

A numerical assessment of an individual’s or organization’s creditworthiness, based on their financial history and current financial situation.

Examples

• The bank used the borrower’s credit rating to determine the interest rate on the loan.
• The company’s credit rating was upgraded due to its consistent profitability.

Synonyms

• Credit score
• FICO score

Antonyms

• Bad credit
• Low credit score

Etymology

The term “credit rating” originated from the need to assess an individual’s or organization’s creditworthiness, with the first credit reporting agency established in the United States in the 19th century.

Usage Notes

Credit ratings are used by lenders to determine the risk associated with lending to an individual or organization. They are also used by investors to assess the creditworthiness of a potential investment.

Cultural References

Credit ratings have been referenced in popular culture, such as in the TV show “The Wolf of Wall Street” and the movie “The Big Short.”

Idiomatic Expressions or Phrases

A “good credit rating” is often seen as a desirable asset, and “bad credit” is viewed as a liability.

Related Words or Phrases

• Credit score
• FICO score
• Bad credit
• Limited credit

Collocations

• Good credit rating
• Bad credit score
• Credit rating agency

Frequency of Use

Credit ratings are commonly used in financial transactions and are an essential component of credit markets.

Common Misspellings

• Credit Reiiting
• Credit Raeiting
• Credit Ratingg