Posted in Finance, Accounting and Economics Terms, Total Reads: 1391
A-Credit is the highest credit rating assigned to any borrower by a lender. Credit Rating system is used by lenders (bank or Individual) to identify a credible borrower. Interest Rate of lending depends on the credit rating of the borrower. The higher the rating of the borrower the lower the interest rate he needs to pay.
Credit rating is an evaluation of borrower’s ability to repay the loan with timely interest payments. This rating depends on many factors like debt to value ratio of the borrower, current income range, borrower’s FICO credit score, current status of past debts taken by the borrower, etc.
For corporate borrowers, credit rating is assigned by credit rating agency like CRISIL, etc. There are several international credit Rating Agencies as well like S & P, Moody’s.