A credit rating estimates the credit worthiness of an individual, corporation, or even a country. It is an evaluation made by credit bureaus of a borrower’s overall credit history. A credit rating is also known as an evaluation of a potential borrower's ability to repay debt, prepared by a credit bureau at the request of the lender . Credit ratings are calculated from financial history and current assets and liabilities. Typically, a credit rating tells a lender or investor the probability of the subject being able to pay back a loan. However, in recent years, credit ratings have also been used to adjust insurance premiums, determine employment eligibility, and establish the amount of a utility or leasing deposit.
A poor credit rating indicates a high risk of defaulting on a loan, and thus leads to high interest rates, or the refusal of a loan by the creditor.
Credit scores for individuals are assigned by credit bureaus (US; UK: credit reference agencies). Credit ratings for corporations and sovereign debt are assigned by credit rating agencies.
US
The main credit bureaus are Experian, Equifax, and TransUnion. A relatively new credit bureau in the US is Innovis.
UK
the main credit reference agencies for individuals are Experian, Equifax, and Callcredit.
Canada
the main credit bureaus for individuals are Equifax, TransUnion and Northern Credit Bureaus/ Experian.
India
commercial credit rating agencies include CRISIL, CARE, ICRA and Brickwork Ratings. The credit bureaus for individuals in India are Credit Information Bureau (India) Limited (CIBIL) and Credit Registration Office (CRO).
The largest commercial credit rating agencies (which tend to operate worldwide) are Dun & Bradstreet, Moody's, Standard and Poor's and Fitch Ratings.
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