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mmaninderkkaur
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A credit rating is an evaluation of the credit worthiness of a debtor, especially a business(company) or a government, but not individual consumers. The evaluation is made by a credit rating agency of the debtor's ability to pay back the debt and the likelihood of default
Types of Credit Rating
•International Ratings•National Ratings
Advantages of creditrating
• Benefits to Investors• Benefits of Rating to the Company• Benefits to Intermediaries
Disadvantages of credit rating
•Biased rating and misrepresentations•Static study•Concealment of material information•Rating is no guarantee for soundness •Rating is no guarantee for soundness of company•Human bias•Reflection of temporary adverse conditions•Difference in rating of two agencies