credit risk


The possibility that a bond issuer will default, by failing to repay principal and interest in a timely manner. Bonds issued by the federal government, for the most part, are immune from default (if the government needs money it can just print more). Bonds issued by corporations are more likely to be defaulted on, since companies often go bankrupt. Municipalities occasionally default as well, although it is much less common. also called default risk.

Use credit risk in a sentence

It was too much of a credit risk and I decided not to go ahead with the plan to do it and that was a good idea.

​ Was this Helpful? YES  NO 6 people found this helpful.

You need to know how much of a credit risk you are view as so you know if you have a good chance to get the loan.

​ Was this Helpful? YES  NO 10 people found this helpful.

With a credit score hovering around five hundred, Seymour had become took big of a credit risk for the bank to give him a loan for his ice cream shop.

​ Was this Helpful? YES  NO 12 people found this helpful.

Show more usage examples...

Mentioned in these terms

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Central Counterparty Clearing House (CCP) forward price