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.

BREAKING DOWN '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 Rating

    An assessment of the creditworthiness of a borrower in general ...
  2. Credit Limit

    The amount of credit that a financial institution extends to ...
  3. Good Credit

    A qualification of an individual's credit history that indicates ...
  4. Bad Credit

    A qualification of an individual's credit history that indicates ...
  5. Bank Credit

    The amount of credit available to a company or individual from ...
  6. Credit Analyst

    A financial professional who has expertise in evaluating the ...
Related Articles
  1. Personal Finance

    Which Is More Important: Credit Report or Credit Score?

    Here's the difference between a credit report and credit score, and which is more important.
  2. Personal Finance

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  3. Personal Finance

    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. ...
  4. Personal Finance

    What Do Credit Score Ranges Mean?

    Take a closer look at what credit scores in each range mean for your financial future.
  5. Personal Finance

    Why The Credit Score You Buy Differs From The Lender Score

    It takes many people by surprise when they purchase credit scores and find the lender's credit score disclosure does not match.
  6. Investing

    Understanding Credit Risk

    Credit risk arises whenever a borrower is expecting to use future cash flows to pay a current debt.
  7. Personal Finance

    Spotting Credit-Repair Scams

    Credit repair scams are common in today's debt-reliant world. Don't be a victim!
  8. Personal Finance

    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.
  9. Personal Finance

    Credit Repair: How to Improve Your Credit Score

    There is no quick fix for a bad credit score but there are several strategies you can take to improve your credit rating and save money over the long term.
  10. Investing

    Millennials: Prevent a Bad Credit Score

    Here are five ways to help prevent getting a bad credit score that could affect future loan, credit card or mortgage approvals.
RELATED FAQS
  1. What's the difference between a credit bureau and a credit rating agency?

    Learn the differences between credit bureaus that report on individuals' creditworthiness and credit rating agencies that ... Read Answer >>
  2. What's the difference between credit score and credit history?

    Check out the differences between credit score and credit history, and learn how your credit history is used to create your ... Read Answer >>
  3. 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 >>
  4. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
  5. What are the benefits of credit ratings?

    Credit ratings are an important tool for borrowers to gain access to loans and debt. Good credit ratings allow borrowers ... Read Answer >>
  6. What is the difference between bad credit and no credit?

    The answer to this question will depend on what information (if any) is found on your credit report, such as any bankruptcy ... Read Answer >>
Trading Center