Credit Agency

AAA

DEFINITION of 'Credit Agency'

A for-profit company that collects information about individuals' and businesses' debts, and assigns a numerical value called a credit score that indicates the borrower's creditworthiness.


Creditors and lenders, such as credit card companies and banks, report their customers' borrowing activity and history to credit agencies. Individuals and businesses can obtain copies of the information reported about them by contacting the credit agency or a related third-party company, and paying a nominal fee.

INVESTOPEDIA EXPLAINS 'Credit Agency'

The information provided to credit agencies includes how much credit is available to that borrower, how much of the available credit they have used, and what their repayment activity looks like. Credit agencies help potential lenders and creditors determine whether to lend or extend credit to an individual or business, by predicting the likelihood that the borrower will repay the debt in a timely manner.



RELATED TERMS
  1. Credit History

    A record of a consumer's ability to repay debts and demonstrated ...
  2. Credit

    1. A contractual agreement in which a borrower receives something ...
  3. Credit Card

    A card issued by a financial company giving the holder an option ...
  4. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
  5. FICO Score

    A type of credit score that makes up a substantial portion of ...
  6. Credit Limit

    The amount of credit that a financial institution extends to ...
Related Articles
  1. Personal Finance

    How A Bad Roommate Can Ruin Your Credit ...

  2. Options & Futures

    6 Major Credit Card Mistakes

  3. Personal Finance

    Procrastinator's Guide To Bill Payment

  4. Credit & Loans

    How is my credit score calculated?

Hot Definitions
  1. Turkey

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

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

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

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center