Credit rating - Central Banking, Indian Financial system Video Lecture | Indian Financial System - B Com

what is credit rating at school teachers
evaluate our progress and results every
day either they're good or bad
then come high school and college and
marks are even more important they
express our potential our strengths and
our weaknesses but we also give
assessments let's think about the World
Cup during the game we are all coaches
of the national team but we are not
valued only as people our houses cities
and the state in which we live are
valued as well assessment is very
important because it affects the ability
to repay a loan indeed whoever lends
money to someone tries to understand the
possibility they have to get it back on
the due date evaluating the past and
future conduct of the debtor even this
assessment is measured in points and is
expressed on a scale like school grades
the judgment is called or credit rating
if adapter has always paid their debts
on time they will get a triple-a but if
the possibility to repay the loan is low
the credit rating drops and if the
debtor of strays even once we might end
up with the Triple C what advantage do
we get in having a good judgment if for
example the raising of our country's
high AAA the state will easily find
investors willing to arrest on the
contrary if others consider our country
risky the spread will rise and the debt
will cost more than one issued by a less
risky country
who decides credit rating the people who
develop credit rating processes
generally work for three major rating
agencies Standard and Poor's Moody's and
Fitch they collect and process all the
available information both numerical
data and opinions for example if your
debtor is a country they evaluate if it
has a good balance between revenue and
expenses its tax system and its pension
system the more solid the country is and
the more it shows a good balance for the
future the higher its credit rating will
be therefore a credit rating is a
synthetic judgment a certificate of
reliability which while being not always
accurate is very important in making our
investment decisions in an informed way