A credit rating is an independent opinion of the capability and willingness of a financial institution to repay its debts – in other words, its financial strength or creditworthiness.
Credit ratings are issued by independent rating agencies, such as the internationally recognised Standard & Poor’s, Fitch Ratings and Moody’s Investors Services. The rating is usually calculated as the likelihood of a failure occurring over a given period and is expressed as an alphabetical rating, with the higher rating e.g. ‘AAA’, being superior having a lower chance of default to a lower rating e.g. ‘C’ a higher risk of default.
Glossary of terms
Find out the meaning of those technical terms. Click the letter that the word begins with.