Plain-English definitions, reviewed by an independent investor
Credit Rating
A credit rating is an agency’s grade of a borrower’s ability to repay debt, from rock-solid to distressed.
A credit rating is an agency’s grade of a borrower’s ability to repay debt, from rock-solid to distressed.
(Letter grades like AAA down to D)
Why it matters
It is the quick risk read on bonds and even countries.
Common confusion
Ratings lag reality and agencies have erred badly; treat as a starting point.
Frequently Asked Questions
Investment vs junk grade?
BBB- and above is investment grade; below is high-yield or junk.
Who gives ratings?
Major agencies like S&P, Moody’s, and Fitch; they can disagree.