Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity. It is a rating given to a particular entity based on the credentials and the extent to which the financial statements of the entity are sound, in terms of borrowing and lending that has been done in the past.
Usually, is in the form of a detailed report based on the financial history of borrowing or lending and credit worthiness of the entity or the person obtained from the statements of its assets and liabilities with an aim to determine their ability to meet the debt obligations. It helps in assessment of the solvency of the particular entity.
These ratings based on detailed analysis are published by various credit rating agencies like CRISIL, Standard & Poor’s, Moody’s Investors Service, and ICRA, to name a few.
The capital market regulator regulates rating agencies in most regions. In India, the capital markets regulator, the Securities and Exchange Board of India (SEBI), regulates the rating agencies in the country.
“If you’re starting a business and will need financing, keep your own credit record in good shape. If you apply for a business loan, the lender will likely review the personal financial statements of the main owners of the business. Concerns about the financial skills of the owners can raise the interest rate on a business loan.”
We at Finance Me Now help you in getting credit rating for your company from the best possible credit rating agency.