Credit Worthiness

AAA

DEFINITION of 'Credit Worthiness'

An assessment of the likelihood that a borrower will default on their debt obligations. It is based upon factors, such as their history of repayment and their credit score. Lending institutions also consider the availability of assets and extent of liabilities to determine the probability of default.

INVESTOPEDIA EXPLAINS 'Credit Worthiness'

Several firms have developed rating systems to determine an individual or company's credit worthiness. It is important for each person to keep track of their credit score because this is the main metric used by institutions when determining if the individual is worthy of a favorable rate.

To learn more about credit worthiness, check out What's a better way to borrow money: overdraft or credit cards?

RELATED TERMS
  1. Credit Rating

    An assessment of the credit worthiness of a borrower in general ...
  2. Credit Application

    A request for an extension of credit, either orally or in written ...
  3. Credit Risk

    The risk of loss of principal or loss of a financial reward stemming ...
  4. Default

    1. The failure to promptly pay interest or principal when due. ...
  5. Default Risk

    The event in which companies or individuals will be unable to ...
  6. Standard & Poor's Underlying Rating ...

    A rating for a debt issue on a stand-alone basis without credit ...
Related Articles
  1. Credit & Loans

    5 Keys To Unlocking A Better Credit ...

  2. Credit & Loans

    Getting Your Kids Their First Credit ...

  3. Credit & Loans

    Take Control Of Your Credit Cards

  4. Credit & Loans

    The Importance Of Your Credit Rating

Hot Definitions
  1. Capitulation

    When investors give up any previous gains in stock price by selling equities in an effort to get out of the market and into ...
  2. Turkey

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

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

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

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  6. 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 ...
Trading Center