Credit Worthiness

AAA

DEFINITION of 'Credit Worthiness'

An assessment of the likelihood that a borrower will default on their debt obligations. It is based upon factors, such as their history of repayment and their credit score. Lending institutions also consider the availability of assets and extent of liabilities to determine the probability of default.

INVESTOPEDIA EXPLAINS 'Credit Worthiness'

Several firms have developed rating systems to determine an individual or company's credit worthiness. It is important for each person to keep track of their credit score because this is the main metric used by institutions when determining if the individual is worthy of a favorable rate.

To learn more about credit worthiness, check out What's a better way to borrow money: overdraft or credit cards?

RELATED TERMS
  1. Credit Rating

    An assessment of the credit worthiness of a borrower in general ...
  2. Credit Application

    A request for an extension of credit, either orally or in written ...
  3. FICO Score

    A type of credit score that makes up a substantial portion of ...
  4. Credit Score

    A statistically derived numeric expression of a person's creditworthiness ...
  5. Credit Crisis

    A crisis that occurs when several financial institutions issue ...
  6. Retail Credit Facility

    A financing method which provides loan services to retail consumers ...
Related Articles
  1. Credit & Loans

    5 Keys To Unlocking A Better Credit ...

  2. Credit & Loans

    Getting Your Kids Their First Credit ...

  3. Credit & Loans

    Take Control Of Your Credit Cards

  4. Credit & Loans

    The Importance Of Your Credit Rating

Hot Definitions
  1. Flight To Quality

    The action of investors moving their capital away from riskier investments to the safest possible investment vehicles. This ...
  2. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  5. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  6. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
Trading Center