DEFINITION of 'Credit Reference'

A credit reference can be a report from a credit agency for either a business or an individual. The term can also be used to mean a letter from a bank or other financial institution with whom a company has done business, confirming to third party that the company or individual is known to the financial firm as a good client.

BREAKING DOWN 'Credit Reference'

Credit references are generally used to determine the creditworthiness of a person or individual. Credit agencies are used most often for this purpose, although individual letters of reference are sometimes necessary. For example, an overseas business wishing to establish its credentials in the United States may obtain a number of credit references from other businesses, banks, vendors and customers.

RELATED TERMS
  1. Credit Reporting Agency

    This term refers to businesses that maintain historical information ...
  2. Confirmed Letter Of Credit

    A second guarantee, in addition to a letter of credit, that commits ...
  3. Credit Agency

    A for-profit company that collects information about individuals' ...
  4. Trade Credit

    An agreement where a customer can purchase goods on account (without ...
  5. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
  6. Transferable Letter Of Credit

    A letter of credit that permits the beneficiary of the letter ...
Related Articles
  1. Small Business

    How To Increase Your Appeal To Prospective Lenders

    Making a business eligible for loans/credit cards at the best possible rates requires crafting an excellent credit profile through the smart use of credit.
  2. Managing Wealth

    Business Vs. Consumer Credit Reports: What's the Difference?

    Find out the difference between a business credit report and a personal credit report, and why it should matter for business owners.
  3. Personal Finance

    Analyzing A Career In Credit Analysis

    If you're a number-cruncher and responsibility doesn't scare you, this could be the job for you.
  4. Personal Finance

    Spotting Credit-Repair Scams

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

    Explaining Credit Ratings

    A credit rating is a third-party assessment about the creditworthiness of an individual or entity.
  6. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  7. 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.
  8. Personal Finance

    Check Your Credit Report

    Make sure there are no errors holding you back from obtaining a loan.
  9. Small Business

    5 Tips to Improve Your Business' Credit

    Use these five essential tips to build up the solid credit history that your business needs before you seek out a business loan.
  10. Investing

    Revolving Credit vs. Line of Credit

    Revolving credit and a line of credit are arrangements made between a lending institution and a business or individual.
RELATED FAQS
  1. What are the different types of letters of credit?

    Learn more about the different types of letters of credit that are used to facilitate exchanges between parties that might ... Read Answer >>
  2. When do I need a letter of credit?

    Learn more about the function of a letter of credit for both the buyer and the seller, and get some examples showing when ... Read Answer >>
  3. When is it necessary to get a letter of credit?

    Capitalize on assets and negate risks by using a letter of credit. Letters of credit are often requested for buying, selling ... 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. Can entities other than banks issue letters of credit?

    Obtaining a letter of credit from a non-bank is legally acceptable according to the ICC, but companies tend to prefer to ... Read Answer >>
  6. 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 >>
Trading Center