A credit rating is a quantitative assessment of a borrower’s creditworthiness in general or in relation to a financial obligation.
Credit scores determine whether a borrower is approved for a loan, as well as the interest rate at which it will be repaid.
A credit rating or score is assigned to any entity that wants to borrow money, be it an individual, a corporation, a state or provincial government, or a sovereign government.
Credit for individual consumers is rated on a numerical scale based on FICO calculations by credit bureaus.
Bonds issued by businesses and governments are rated by credit agencies using a letter system from AAA to D.
Bankruptcy is a legal proceeding carried out in order for individuals or legal entities to be freed from their debts, while at the same time providing creditors with the opportunity to repay them.
A debtor in possession (DIP) is an individual or entity that has filed for Chapter 11 bankruptcy protection but still owns property that creditors have legal claims under a lien or other lien.
Good credit is a classification of a person’s credit history, indicating that the borrower has a relatively high credit rating and is a safe credit risk.