A credit rating assesses the credit worthiness of an individual, corporation, or even a country. Credit ratings are calculated from financial history and current assets and liabilities. Typically, a credit rating tells a investor the probability of the subject being able to pay back a loan.
However, in recent years, credit ratings have also been used to adjust insurance premiums, determine employment eligibility, and establish the amount of a utility or leasing deposit. A rating is an opinion of the credit rating agency (CRA), on the future ability and legal obligation of the company whose instrument is being rated, to make timely payments of principal and interest on the obligation. The rating measures the probability that the issuer will default on the security over the life of the instrument being rated, this is expressed by means of a symbol.
What are the factors that influences a person's credit rating? ? - Ability to pay a loan
- Interest
- Amount of credit used
- Saving patterns
- Spending patterns
- Debt
What are the fWhich are the common credit rating agencies?
In India, the main credit bureaus are CRISIL, ICRA and Credit Registration Office (CRO). The largest credit rating agencies (which tend to operate worldwide) are Moody's, Standard and Poor's and Fitch Ratings.
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