A credit rating is an evaluation of how likely a company or government is to pay back debt, conducted by credit rating agencies. The document discusses the types of credit ratings, advantages like benefits to investors and rated companies, and disadvantages such as potential bias, static nature not reflecting temporary conditions, and different ratings from multiple agencies.

2. 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

5. Types of Credit Rating
•International Ratings
•National Ratings

6. Advantages of credit
rating
• Benefits to Investors
• Benefits of Rating to the Company
• Benefits to Intermediaries

8. 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