credit rating

Meaning

A credit rating is an assessment of the creditworthiness of a business or government. It indicates how likely they are to pay back their debts based on their financial history. Lenders and investors use this rating to decide whether to approve loans and what interest rates to charge.

Examples

• The company's credit rating was downgraded after they missed several loan payments.

  The company's credit rating was downgraded after they missed several loan payments.

• Maintaining a high credit rating is essential if we want to secure low-interest funding for our next project.

  Maintaining a high credit rating is essential if we want to secure low-interest funding for our next project.

• Before partnering with them, we should check their credit rating to ensure they are financially stable.

  Before partnering with them, we should check their credit rating to ensure they are financially stable.

• A strong credit rating allows multinational corporations to issue bonds at very competitive rates.

  A strong credit rating allows multinational corporations to issue bonds at very competitive rates.

• The bank refused to extend our line of credit because of our current credit rating.

  The bank refused to extend our line of credit because of our current credit rating.

Common Mistakes

• ✗ We need to improve our credit score rating before applying for the corporate loan.

  ✓ We need to improve our credit rating before applying for the corporate loan.

  Do not combine 'credit score' (typically used for individual consumers) and 'credit rating' (typically used for businesses and governments) into a single phrase.

• ✗ The agency gave our startup a bad credit rate.

  ✓ The agency gave our startup a bad credit rating.

  Use 'credit rating' for the evaluation of creditworthiness. 'Credit rate' is incorrect, although 'interest rate' is a valid financial term.

Related Expressions

Practice

• If our ___ drops, we will have to pay higher interest rates on our corporate bonds.

  💡 The official evaluation of a company's financial reliability.

  Show answer

  credit rating

• The major financial agencies updated the country's sovereign ___ to AAA.

  💡 A score or grade representing creditworthiness.

  Show answer

  credit rating