Credit Rating Agencies (CRA)

Credit Rating Agencies (CRAs) are organizations that evaluate the creditworthiness of borrowers, including governments and corporations. They assign ratings that indicate the likelihood of repayment, often using a letter scale (e.g., AAA, A, B). Higher ratings suggest lower risk for investors, while lower ratings indicate higher risk. CRAs help investors make informed decisions about lending or investing by providing an independent assessment of financial strength. Their ratings can influence interest rates and borrowing costs, impacting the overall economy. Key players in this industry include Moody's, Standard & Poor's, and Fitch Ratings.