What does bun/cr ratio mean Meaning and Definition

Pronunciation

/ˈbʌn ˌkræʃoʊ ˈreɪʃoʊ/ 🔊

Part of Speech

Noun

Definition

A financial metric used to evaluate the creditworthiness of a borrower, representing the ratio of a borrower’s credit balance to their credit limit.

Examples

• The lender considered the borrower’s bun/cr ratio before approving the loan.
• A high bun/cr ratio can negatively impact one’s credit score.

Synonyms

• Credit utilization ratio
• Debt-to-credit ratio

Antonyms

• Low credit utilization
• Good credit score

Additional Information

The bun/cr ratio is an essential metric in determining an individual’s creditworthiness. A high bun/cr ratio can indicate a higher risk for lenders, potentially leading to loan denial or higher interest rates. Maintaining a low bun/cr ratio is crucial for maintaining a good credit score.

Experts recommend keeping the bun/cr ratio below 30% to demonstrate responsible credit behavior. A ratio above 70% can significantly lower one’s credit score.

Calculating the bun/cr ratio involves dividing the borrower’s total credit balance by their total credit limit and multiplying by 100. For instance, if a borrower has a credit balance of $2,000 and a credit limit of $5,000, their bun/cr ratio would be 40%.

Eymology

The term ‘bun/cr ratio’ originated from the financial industry, where ‘bun’ refers to the borrower’s credit balance and ‘cr’ represents the credit limit.

Usage Notes

The bun/cr ratio is commonly used in the financial industry to assess an individual’s creditworthiness. It is essential to understand the concept of the bun/cr ratio to maintain a good credit score.

Cultural References

The bun/cr ratio has been mentioned in various financial publications and media outlets, highlighting its significance in personal finance.

Idiomatic Expressions or Phrases

‘Keep your bun/cr ratio in check’ is a common idiomatic expression that encourages individuals to maintain a low bun/cr ratio to ensure good credit health.

Related Words or Phrases

• Credit score
• Credit utilization
• Debt-to-income ratio

Collocations

• Good bun/cr ratio
• High bun/cr ratio
• Low bun/cr ratio

Frequency of Use

The term ‘bun/cr ratio’ is commonly used in the financial industry and personal finance discussions.

Common Misspellings

• bun/cr rato
• bun/cr raito
• bun/cr ratioe