Credit Rating Agency

A credit rating agency (CRA) is a company that assigns credit ratings for issuers of certain types of debt obligations as well as the debt instruments themselves. In some cases, the servicers of the underlying debt are also given ratings.

In most cases, the issuers of securities are companies, special purpose entities, state and local governments, non-profit organizations, or national governments issuing debt-like securities (i.e., bonds) that can be traded on a secondary market. A credit rating for an issuer takes into consideration the issuer's credit worthiness (i.e., its ability to pay back a loan), and affects the interest rate applied to the particular security being issued.

The value of such security ratings has been widely questioned after the 2007-09 financial crisis. In 2003, the U.S. Securities and Exchange Commission submitted a report to Congress detailing plans to launch an investigation into the anti-competitive practices of credit rating agencies and issues including conflicts of interest. More recently, ratings downgrades during the European sovereign debt crisis of 2010-11 have drawn criticism from the EU and individual countries.

A company that issues credit scores for individual credit-worthiness is generally called a credit bureau (US) or consumer credit reporting agency (UK).

Read more about Credit Rating Agency:  Uses of Ratings, Criticism, List of Credit Rating Agencies, The Big Three, CRA Business Models

Other articles related to "credit ratings, rating, ratings, credit rating agency, credit rating, credit":

Nationally Recognized Statistical Rating Organization - History
... The safety of these securities, under this approach, is reflected in their credit ratings, as determined by certain highly respected CRAs ... in the industry, added to this number, first with Dominion Bond Rating Service (DBRS, a Canadian CRA) in 2003, and A.M ... Best (highly regarded in particular for its ratings of insurance firms) in 2005 ...
Television Content Rating Systems
... Television content rating systems give viewers an idea of the suitability of a television program for children or adults ... Many countries have their own television rating system and each country's rating process may differ due to local priorities ... A rating is usually set for each individual episode of a television series ...
Credit Rating Agency - CRA Business Models
... Most credit rating agencies follow one of two business models ... CRAs relied on a "subscriber-based" business model where the CRA would not distribute the ratings for free but would instead only provide the ratings to subscribers ... still rely on this business model, which proponents believe allows the CRA to publish ratings that are less likely to be tinged by certain types of conflicts of interest ...
Credit Rating
... A credit rating evaluates the credit worthiness of a debtor, especially a business (company) or a government ... It is an evaluation made by a credit rating agency of the debtor's ability to pay back the debt and the likelihood of default ... Credit ratings are determined by credit ratings agencies ...

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