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Bonds

Credit Rating

An assessment of a borrower's creditworthiness by rating agencies.

In depth

Major agencies: S&P, Moody's, Fitch. Investment grade: BBB-/Baa3 and above. High yield ("junk"): below BBB-/Baa3. Ratings affect borrowing costs significantly — a downgrade from investment grade to junk forces selling by funds restricted to IG, often spiking yields.

Frequently asked about Credit Rating

What is Credit Rating?

An assessment of a borrower's creditworthiness by rating agencies. Major agencies: S&P, Moody's, Fitch. Investment grade: BBB-/Baa3 and above. High yield ("junk"): below BBB-/Baa3. Ratings affect borrowing costs significantly — a downgrade from investment grade to junk forces selling by funds restricted to IG, often spiking yields.

Why does Credit Rating matter for investors?

In bonds, Credit Rating is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.

How is Credit Rating used in practice?

Major agencies: S&P, Moody's, Fitch. Investment grade: BBB-/Baa3 and above.

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