What is a Credit Rating?
July 3rd, 2007 | by HelpingU |A credit rating evaluates the credit worthiness of an individual, corporation, or business. Your credit rating is calculated from your financial history balanced against your current assets and liabilities. A credit rating tells a lender or investor the history and current ability of a borrower to pay back a loan. Recently, credit ratings have also been used to adjust insurance premiums, determine employment eligibility, and establish the amount of a utility service deposit such as your electric bill, water bill or even cellphone service.
A poor credit rating indicates that a person or entity may be high risk of defaulting on a loan, and thus leads to high interest rates or the refusal of a loan by the lender.
