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A loan is a debt—essentially a promise, often contractual, and a credit rating determines the likelihood that the borrower will be able and willing to pay back a loan within the confines of the loan agreement, without defaulting. A high credit rating indicates a high possibility of paying back the loan in its entirety without any issues; a poor credit rating suggests that the borrower has had trouble paying back loans in the past and might follow the same pattern in the future. The credit rating affects the entity's chances of being approved for a given loan or receiving favorable terms for said loan.
We do not focus on the likelihood that the borrower will be able and willing to pay back the loan. That is the lender's internal models and know-how. We provide the likelihood of the borrower not being able or willing to pay back the loan once overdue. You would call it a type of negative rating or scoring model.
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