credit rating agency

A credit rating agency is a company that evaluates the financial health of organizations and governments by analyzing their ability to repay debts. They assign ratings—such as AAA or BBB—that reflect the level of risk associated with lending to them. Investors and lenders use these ratings to make informed decisions about where to put their money and to determine interest rates. These agencies help bring transparency to financial markets by providing independent assessments of creditworthiness, contributing to overall financial stability and informed investment choices.