Definition of Credit Rating in finance

The credit rating of an individual refers to the likelihood that that individual will be able to repay any debt. The credit rating is usually given in the form of a FICO score, which is based upon borrowing and repayment history as well as income, assets etc.

Individuals with a poor credit rating typically find it harder to borrow money and have to pay higher interest rates on their debt to compensate the lender for the additional risk.