Credit rating

A credit rating is a standard score assigned to an entity or its securities by a credit rating agency, based on a review of its financial condition. The credit rating agencies all have different scoring systems, but the highest score generally given is AAA, and the lowest score is either C or D. If a credit rating is sufficiently high, investors will likely accept a lower effective interest rate on any debt issued by an entity, on the grounds that there is a low risk of default. Conversely, an entity given a low score may not be able to secure any debt financing at all.

Related Courses

Credit and Collection Guidebook 
Effective Collections