Rating Agencies

Rating agencies are organizations that evaluate the creditworthiness of companies, governments, and financial products. They provide ratings that indicate the risk associated with investing in these entities—higher ratings suggest lower risk and a greater likelihood of timely payments, while lower ratings indicate higher risk. Investors and institutions rely on these ratings to make informed decisions about lending money or investing. Some of the most well-known agencies include Moody's, Standard & Poor’s, and Fitch. Their assessments influence interest rates and borrowing costs, impacting the broader economy.