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. Debit Card

    An electronic card issued by a bank which allows bank clients ...
  2. Credit Card

    A card issued by a financial company giving the holder an option ...
  3. Credit Score

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

    1. A contractual agreement in which a borrower receives something ...
  5. Bankruptcy

    A legal proceeding involving a person or business that is unable ...
  6. Thin File

    A limited credit history which can make it difficult to get credit ...
RELATED FAQS
  1. What factors should I consider when shopping for the best mortgage lender?

    Mortgage lenders offer a variety of loan products tailored to specific borrower needs and qualifications. Lenders calculate ... Read Full Answer >>
Related Articles
  1. Budgeting

    How Much Debt Can You Handle?

    Follow these five steps to manage debt without cutting up your credit cards.
  2. Credit & Loans

    Credit, Debit And Charge: Sizing Up The Cards In Your Wallet

    Not all plastic is equal! Learn the difference between the three kinds, and how each can affect your finances.
  3. Credit & Loans

    Digging Out Of Personal Debt

    Find out why good intentions can put consumers in an even bigger hole than before.
  4. Options & Futures

    Top 7 Most Common Financial Mistakes

    Choose fortune over disaster by avoiding these money traps.
  5. Personal Finance

    Looking To Clear Up Your Credit Report?

    If you look at your credit report you might see any number of various items that are harmful to your credit score, but you can learn how to remove them.
  6. Personal Finance

    How To Find A Job With Poor Credit?

    It's not legal for an employer to refuse to hire you for having bad credit, but he doesn't have to say that you weren't hired because of your bankruptcy.
  7. Credit & Loans

    How Bad Is My Credit Score?

    You've seen the number, but what does it mean? Here's how to assess your credit score and get to a better place if needed.
  8. Personal Finance

    Understanding Credit

    Credit has three common meanings in the financial world.
  9. Credit & Loans

    Buying A House? Avoid These 7 Mistakes

    Owning your own home gives you a feeling of independence that renting can’t offer, and there are big financial benefits, too.
  10. Credit & Loans

    How High Is A 'Good' Credit Score?

    How high a credit score do you need to get a home mortgage or buy a car? Read on for some actual numbers.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center