Credit Criteria

AAA

DEFINITION of 'Credit Criteria'

The various financial characteristics that lenders analyze when scrutinizing a prospective borrower. Credit criteria include a borrower's assets and liabilities, income and expenses and credit history. Favorable criteria will usually result in approval, with poor criteria typically having the opposite effect.

INVESTOPEDIA EXPLAINS 'Credit Criteria'

Credit criteria can also include the number of open accounts with other creditors and the borrower's standing with each one. Any single credit criterion can be used to deny credit to the prospective borrower, but the lender must obey all laws of the credit protection act. Race, age and gender are not acceptable criteria for acceptance or rejection of credit.

RELATED TERMS
  1. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  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. Debit Card

    An electronic card issued by a bank which allows bank clients ...
  5. Credit Score

    A statistically derived numeric expression of a person's creditworthiness ...
  6. Credit Card Authorized User

    Definition of an authorized user of a credit card.
Related Articles
  1. How Much Debt Can You Handle?
    Budgeting

    How Much Debt Can You Handle?

  2. Credit, Debit And Charge: Sizing Up ...
    Credit & Loans

    Credit, Debit And Charge: Sizing Up ...

  3. Digging Out Of Personal Debt
    Credit & Loans

    Digging Out Of Personal Debt

  4. Top 7 Most Common Financial Mistakes
    Options & Futures

    Top 7 Most Common Financial Mistakes

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center