Credit rating

A credit rating assesses the credit worthiness of an individual, corporation, or even a country. Credit ratings are considered from financial history and current assets and liabilities. Typically, a credit rating tells a lender or investor the probability of the subject being capable to pay back a loan. However, in recent years, credit ratings have also been used to adjust insurance premiums, determine employment eligibility, and establish the amount of a utility or leasing deposit.

A poor credit rating indicates a high risk of non-payment on a loan, and thus leads to high interest rates or the denial of a loan by the creditor.