Credit Rating Agencies, Credit Scoring, and Credit Information Companies - Explained | MODULE D: FINANCIAL PRODUCTS AND SERVICES
Credit Rating Agencies and Their Functions Credit Rating refers to an evaluation made by a credit rating agency regarding the creditworthiness of an entity (such as a corporation or government) or a financial instrument (such as a bond). It reflects the probability of timely repayment of debt obligations. What is Credit Rating? Credit rating is a symbolic representation of an entity's ability to repay its debts, based on historical and projected data, financial health, and market conditions. Ratings help investors make informed decisions about risk. Credit Rating Agencies (CRAs) Credit Rating Agencies are independent organizations that assess and assign ratings to entities and their financial instruments. Notable CRAs include: Standard & Poor's (S&P) Moody's Investors Service Fitch Ratings CRISIL (India) ICRA (India) CARE Ratings (India) History of Credit Rating The con...