Credit Rating

Formal evaluation of a company’s ability to pay interest and repay principal on borrowed money, as published by a credit rating agency or service. Also, from a personal investor perspective, a published ranking, based on detailed financial analysis by a credit bureau, of one’s financial history, specifically as it relates to one’s ability to meet debt obligations. The highest rating is usually AAA and the lowest is D. Lenders use this information to decide whether to approve a loan.