What is a credit rating?
Your credit rating is drawn from your credit report, which outlines your borrowing, charging, and repayment activities. A good rating helps you reach financial goals; a poor rating limits your financial opportunities. Since your credit report influences whether you are able to buy a home and get a job, it is extremely important to protect your credit rating by making loan and bill payments on time and by not taking on more debt than you can handle. Who Is Allowed to See Your Credit Report? Credit bureaus can provide information only to the following requestors: (1) creditors who are considering granting or have granted you credit; (2) employers considering you for employment, promotion, reassignment, or retention; (3) insurers considering you for an insurance policy or reviewing an existing policy; (4) government agencies reviewing your financial status or government benefits; and (5) anyone else with a legitimate business need for the information, such as a potential landlord. Credit
A credit rating is an independent assessment of the creditworthiness of a bond (note or any security of indebtedness) by a credit rating agency. It measures the probability of the timely repayment of principal and interest of a bond. Generally, a higher credit rating would lead to a more favorable effect on the marketability of a bond. The credit rating symbols (long-term) are generally assigned with “triple A” as the highest and “triple B” (or Baa) as the lowest in investment grade (See below for definition of rating grades). Anything below triple B is commonly known as a “junk bond.
Well it is a number that is used by potentially important people in everyone’s life. It is used by banks, by credit card companies, by mortgage lenders, by landlords, and be virtually everyone else who can stand to benefit from associating themselves with financially responsible people. So it is a number that attempts to evaluate how well you use your money. Unfortunately there are things that can do that don’t necessarily reflect on your level of responsibility fiscally but that will ruin your score. For instance applying for too many credit opportunities (i.e. to take advantage of the 10% discount that you get on a purchase for doing so, or to get a free t shirt in college – totally not worth it!). Another thing that will kill a credit score is being late on anything. You can just do it once and take a big hit in your score and many people just don’t understand the kind of effect it will have on their credit rating. Another thing is disputed charges. Often a person will be wrongly ch
Many municipal bonds receive a credit rating from one or more “nationally recognized statistical rating organizations,” known as rating agencies. These ratings typically represent the rating agencies’ estimation of the likelihood that the issuer will make payments on the bonds in a full and timely manner. Ratings often are assigned based on the issuer’s financial health and other factors that each rating agency determines are relevant. In addition, issuers may obtain bond insurance or other forms of “credit enhancement” that will typically result in a higher rating on the bonds due to the rating agency’s estimation of the financial strength of the provider of the bond insurer or other credit provider. Both the rating based on insurance or credit enhancement and the issuer’s own “underlying” rating are subject to change at any time upon determination by the rating agency that such change is warranted. A rating represents an opinion of the rating agency that has issued the rating and is
