DEFINITION of 'A-Credit'

The highest credit grade available as assigned to a borrower by a lender. Lenders use a credit grading system to qualify borrowers. The higher the borrower's credit grade, the lower the interest rate offered to that borrower on a loan.

BREAKING DOWN 'A-Credit'

Credit grading by lenders is based on many factors, including a borrower's FICO score, debt-to-income ratio, loan-to-value ratio and past delinquencies. This grade of credit may be associated with a plus or minus for more depth. In this case, a grade of "A+" would indicate higher credit worthiness than a score of "A-".

RELATED TERMS
  1. Credit Scoring

    A statistical analysis performed by lenders and financial institutions ...
  2. Bank Credit

    The amount of credit available to a company or individual from ...
  3. Prime Borrower

    A prime borrower is considered likely to make loan payments on ...
  4. Credit Agency

    A for-profit company that collects information about individuals' ...
  5. Lender

    Someone who makes funds available to another with the expectation ...
  6. Credit Score

    A credit score is a number ranging from 300-850 that depicts ...
Related Articles
  1. Personal Finance

    A Good Credit Score: Why Do You Need It?

    Your credit score can affect your ability to borrow money, buy a house or even get a job.
  2. Personal Finance

    Purchasing a Home with Bad Credit Is Possible: Here's How

    A bad credit report can become an obstacle, resulting in denials for credit or higher interest rates, but borrowers with low credit scores can still purchase a home.
  3. Investing

    What does Investment Grade Mean?

    Investment grade is a term used to describe a favorable rating for corporate and municipal bonds.
  4. Personal Finance

    What Lenders Look At On Your Credit Report

    What do lenders consider when they look at your credit report? Several things, including your income and payment history.
  5. Personal Finance

    The Basics of Lines of Credit

    Learn how a line of credit, hybrids of credit cards and normal loans, can help (and hurt) your finances, and how to find the best one to suit your needs.
  6. Investing

    What Lenders Look at on Your Credit Report

    What do lenders consider when they look at your credit report? It’s a simple question with a complicated answer.
  7. Personal Finance

    Trended Credit Data Could Increase Interest Rates for Borrowers (FNMA, EFX)

    Mortgage lenders will soon be required to use trended credit data to qualify borrowers. As a result, many borrowers could have to take higher interest rates.
  8. Personal Finance

    Personal Loans: Consider These Alternative Lenders

    Looking for an alternative source of financing for a personal loan? Take a look at these companies.
  9. Investing

    Explaining Debt

    Debt is any amount a borrower owes a lender.
  10. 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.
RELATED FAQS
  1. 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 >>
  2. What is the difference between the Five Cs of Credit and credit rating?

    Learn the difference between the five C's of credit and credit rating and how they are used together by banks and finance ... Read Answer >>
  3. What is the most important "C" in the Five Cs of Credit?

    Learn how the five C's of credit affect new credit application decisions, and understand how a lender analyzes each aspect ... Read Answer >>
Trading Center