Financial Quotient

What's a credit rating?

A credit rating is an assessment of a borrower's financial standing or ability to pay its debt on time.

Simply put, credit rating forecasts the possibility or risk of a default on payments by any entity that seeks to borrow money by issuing securities such as bonds.

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A version of this article appeared in the print edition of The Sunday Times on January 19, 2020, with the headline 'What's a credit rating?'. Print Edition | Subscribe