What it is
Credit risk refers to the chance the company or organization that the investment came from will not be able to pay the interest or repay in full what it owes investors.
This type of risk is specific to debt securities, which are investment products that allow investors to lend money to a company or an organization (like the government), usually in exchange for regular interest payments.
What it means for you
Credit risk is one of the risks you’ll face if you put your money in debt securities such as corporate bonds, Treasury bonds and Treasury notes. Investing in Money Market instruments can involve this risk as well.
To get an idea of how much of this risk your money will actually be facing, you can take a look at the bond rating.
