Thursday, 23 January 2014

Quick look at Credit Rating

Many credit rating agencies exist in India, some reliable, some not so reliable. Each has its own scope but mostly overlapping scopes.

A list:

2. Crisil
3. Care
4. BrickWorkRatings

Firstly a quick look at how credit rating is done:

Wiki:Credit Rating
A credit rating is an evaluation of the credit worthiness of a debtor, especially a business (company) or a government. The evaluation is made by a credit rating agency of the debtor's ability to pay back the debt and the likelihood of default.

Credit ratings are determined by credit ratings agencies. The credit rating represents the credit rating agency's evaluation of qualitative and quantitative information for a company or government; including non-public information obtained by the credit rating agencies' analysts.

Credit ratings are not based on mathematical formulas. Instead, credit rating agencies use their judgment and experience in determining what public and private information should be considered in giving a rating to a particular company or government.

© Crisil Rating


Further Reading:

1. Standard & Poor

2. Moodys

3. Fitch

4. TE Rating

The TE credit rating is driven by a model created at Trading Economics. We take into account the average grade given by credit rating agencies plus multiple economic indicators, exchange rates, government bond yields, stock indexes, commodity prices and very little discretion. Unlike the ratings provided by the major credit agencies, our index is numerical...

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