A-Credit

DEFINITION of 'A-Credit'

The highest credit grade available as assigned to a borrower by a lender. Lenders use a credit grading system to qualify borrowers. The higher the borrower's credit grade, the lower the interest rate offered to that borrower on a loan.

BREAKING DOWN 'A-Credit'

Credit grading by lenders is based on many factors, including a borrower's FICO score, debt-to-income ratio, loan-to-value ratio and past delinquencies. This grade of credit may be associated with a plus or minus for more depth. In this case, a grade of "A+" would indicate higher credit worthiness than a score of "A-".

RELATED TERMS
  1. Basis Grade

    The minimum accepted standard that a deliverable commodity must ...
  2. Credit Agency

    A for-profit company that collects information about individuals' ...
  3. Credit Scoring

    A statistical analysis performed by lenders and financial institutions ...
  4. Prime Borrower

    A prime borrower is considered likely to make loan payments on ...
  5. B/C Loan

    A classification of loans associated with the borrowers that ...
  6. Credit Denial

    The rejection of a credit application by the prospective lender. ...
Related Articles
  1. Credit & Loans

    Understanding Credit Risk

    Credit risk arises whenever a borrower is expecting to use future cash flows to pay a current debt.
  2. Investing

    What does Investment Grade Mean?

    Investment grade is a term used to describe a favorable rating for corporate and municipal bonds.
  3. Options & Futures

    Lending Clubs: Better Than Banks?

    If you need to borrow money and your credit is making it tough, this new option may be just what you're looking for.
  4. Credit & Loans

    The Basics Of Lines Of Credit

    Lines of credit are potentially useful hybrids of credit cards and normal loans. Learn how a line of credit can help (and hurt) your finances, and how to find the best one to suit your needs. ...
  5. Credit & Loans

    What Do Credit Score Ranges Mean?

    Take a closer look at what credit scores in each range mean for your financial future.
  6. Credit & Loans

    What Lenders Look At On Your Credit Report

    What do lenders consider when they look at your credit report? Several things, including your income and payment history.
  7. Credit & Loans

    Personal Loans: Consider These Alternative Lenders

    Looking for an alternative source of financing for a personal loan? Take a look at these companies.
  8. Economics

    Explaining Debt

    Debt is any amount a borrower owes a lender.
  9. Credit & Loans

    What are the Five C's of Credit?

    The five C’s of credit are what banks and other lenders evaluate about a potential borrower when making a lending decision. The five C’s are Character, Capacity, Capital, Collateral and Conditions. ...
  10. Credit & Loans

    The 5 Biggest Factors That Affect Your Credit

    With possible scores ranging from 300 to 850, credit scores reveal someone’s history for paying bills and being responsible.
RELATED FAQS
  1. Which securities are considered investment grade?

    Learn which securities are considered investment grade by credit rating agencies such as Standard & Poors and Moody's and ... Read Answer >>
  2. Why do high profiting sales mitigate credit risk?

    Learn more about credit risk in loaning to individuals and businesses. Understand how credit risk is determined and the impact ... Read Answer >>
  3. What is the difference between the Five Cs of Credit and credit rating?

    Learn the difference between the five C's of credit and credit rating and how they are used together by banks and finance ... Read Answer >>
  4. What is the most important "C" in the Five Cs of Credit?

    Learn how the five C's of credit affect new credit application decisions, and understand how a lender analyzes each aspect ... Read Answer >>
  5. How can I improve my chances of getting a credit limit increase?

    Learn how to improve your chances of being approved for a credit limit increase by understanding what lenders are looking ... Read Answer >>
  6. What's more important to lenders, my credit score or my credit report?

    Find out why lenders care more about your credit report than your credit score and why you should care more about your credit ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center