answersLogoWhite

0

What is a credit rating?

User Avatar

Wiki User

โˆ™ 2011-10-04 07:56:26

Best Answer

Your credit rating - or score - is a grade of how well you handle credit and loans. It's an evaluation of your track record for making credit payments and paying off debt on time.

It depends on two things: 1) The length of your credit history i.e. Do you have a track record that lets people see how well you handle credit? 2) The quality of your credit history i.e. During the time that you've had a credit history, have you established a pattern of making payments on time according to the terms of your loan or credit agreements?

It's important to know that the amount of money you make is not a factor in your credit score. A person with a small income who makes credit payments on time will most likely have a better score than a person with a large income who has a history of making credit payments late or defaulting on loans.

A credit rating evaluates the credit worthiness of an issuer of specific types of debt, specifically, debt issued by a business enterprise such as a corporation or a government. It is an evaluation made by credit rating agency of the debt issuers likelihood of default

Credit ratings are determined by credit ratings agencies. The credit rating represents the credit rating agency's evaluation of qualitative and quantitative information for a company or government; including non-public information obtained by the credit rating agencies analysts. Credit ratings are not based on mathematical formulas. Instead, credit rating agencies use their judgment and experience in determining what public and private information should be considered in giving a rating to a particular company or government. The credit rating is used by individuals and entities that purchase the bonds issued by companies and governments to determine the likelihood that the government will pay its bond obligations

User Avatar

Wiki User

โˆ™ 2011-10-04 07:56:26
This answer is:
User Avatar
Study guides

What is rhetorical device

Who was the father of rationalism

What is a cash advance

What is discretionary spending within a budget

โžก๏ธ
See all cards
2.11
โ˜†โ˜…โ˜†โ˜…โ˜†โ˜…โ˜†โ˜…โ˜†โ˜…
9 Reviews

Add your answer:

Earn +20 pts
Q: What is a credit rating?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Related questions

Which among these is a credit rating agency?

Which among these is a credit rating ?


What does the bond credit rating assess?

Bond credit rating is used to assess the credit worthiness of a corporation or government's debt issues. A bond credit rating is similar to a credit rating that an individual person receives.


What is a poor credit rating?

a poor credit rating would be 0


What is a credit ratingvgggjgggg?

A credit rating is a rating of how well a person pays their bills. If bills are paid on time the credit rating goes up.


What is the purpose of a credit rating?

The purpose of a credit rating is to determine a person's creditworthiness.


When was Pacific Credit Rating created?

Pacific Credit Rating was created in 1993.


How many credit rating agency in India?

there are 7 credit rating agencies in INDIA


What is the difference between credit score and credit rating?

The difference between credit score and credit rating is simple Credit score (or credit history) is the history of paying back debt where as credit rating the the reputation for paying back money owing


Can your credit rating or score improve without using your credit card?

Yes, your credit rating is based upon all forms of credit, not just your credit card. For example if you have a telephone on a plan, this is a form of credit and that will add to your credit history which increases your credit rating.


When bad credit expires does the credit rating go up?

No. Your credit rating will remain the same long after the bad credit has expired. In order to get a better credit rating, you'll have to obtain a credit card or loan of some sort. Making monthly payments and staying within the credit limit will gradually improve your credit rating over time.


What state has the worst credit rating?

Illinois has the worst credit rating in the Uninted State of America!


What is a D credit rating?

A D credit rating is the opposite of a D cup breast - bad.

People also asked