Glossary entry
A credit rating is an opinion about an issuer's or debt instrument's relative creditworthiness, usually expressed on an agency's scale. It focuses on the ability and willingness to meet obligations, not on every investment risk. Ratings may change as information develops, and different agencies can reach different conclusions using their own methodologies.
Illustrative example
A bond receives a lower rating after its issuer's debt burden rises. Investors may demand a higher yield, which can reduce the bond's market price.
What to consider
A rating is not a buy recommendation or repayment guarantee. Review the scale, outlook, underlying evidence, and risks outside creditworthiness.
General information, not a personal recommendation. Product availability, rights, and obligations are determined by the relevant provider, jurisdiction, and approved agreements.