credit rating

Definition

A published ranking, based on detailed financial analysis by a credit bureau, of one's financial history, specifically as it relates to one's ability to meet debt obligations. The highest rating is usually AAA, and the lowest is D. Lenders use this information to decide whether to approve a loan.

Use credit rating in a sentence

After our company emerged from bankruptcy, we had a low credit rating and we found it very hard to issue bonds at an inexpensive price.

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John missed so many student loan payments that the credit bureau lowered his credit rating, thus making him ineligible for a low interest home loan.

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Standard & Poors recently downgraded the credit rating of XYZ Corporation resulting in less demand for its new debentures and an increase in its overall borrowing costs.

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