ratings agencies

Ratings agencies are organizations that evaluate the creditworthiness of governments, companies, or financial products. They analyze financial health, debt levels, and economic stability to determine the likelihood of timely debt repayment. Their assessments, expressed through credit ratings, influence investor confidence and borrowing costs. Higher ratings suggest lower risk, making it easier and cheaper for entities to borrow money, while lower ratings indicate higher risk, potentially increasing borrowing costs or limiting access to funding. Major agencies include Moody’s, Standard & Poor’s, and Fitch. Their role is to provide transparent, independent evaluations to help investors make informed decisions.