How do you define a Credit Rating?

The credit rating is impacted by a number of factors, some of which are controllable, others of which are not.

Mumbai, India (prHWY.com) June 21, 2012 - A credit rating is a number or a tag based on which the lenders normally determine whether or not they will give a loan or line of credit to an individual or a company or for that matter a nation. The credit rating is impacted by a number of factors, some of which are controllable, others of which are not.

Credit Rating is an evaluation made by a credit rating agency which speaks off the debtor's ability to pay back the debt and the probability of default. These ratings are not based on mathematical formulas. Instead, credit rating agencies use their judgment and expertise in determining what public and private information should be considered in giving a rating to a particular individual, company or country. The credit rating is used by individuals and entities that purchase the bonds issued by companies and governments to determine the likelihood that the government will pay its bond obligations.

A low or a poor credit rating implies that as per the credit rating agency's opinion that the company or government has a high risk of defaulting. The credit rating agency's opinion is based on the analysis of the entity's history and analysis of long term economic prospects.

Let us go through a case study which describes how to get a good credit score. http://casestudy.co.in/how-to-improve-your-credit-rating-case-study/2011/12/29/

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Tag Words: case studies, case study, economy, financial, credit rating

Categories: Finance

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