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Credit Ratings: Credit Jargon Explained

Posted on 16. Feb, 2010 by emilythomas in Daily Finance Definitions

Most of the time, “credit rating” means the same as “credit score.” But occasionally, people use the term credit rating to refer to a broad classification of credit scores, which helps to determine risk.

For consumers, credit ratings fall into 5 bands, one star to five stars, where one star indicates sub-prime credit customers and five stars indicates excellent credit customers. Five stars generally characterises undoubted customers who typically get approved for credit easily. Average risk consumers score three stars.

The term “credit rating” can also apply in the corporate world. For corporations and business entities, credit ratings are given by specialist firms such as Standard and Poors or Moody and stock market analysts, and are expressed in letters. AAA+ is the best corporate credit rating.