Credit rating and credit rating agencies in India.

Credit rating

A credit rating assesses the credit worthiness of an individual, corporation, or even a country. Credit ratings are calculated from financial history and current assets and liabilities. Typically, a credit rating tells a lender or investor the probability of the subject being able to pay back a loan. However, in recent years, credit ratings have also been used to adjust insurance premiums, determine employment eligibility, and establish the amount of a utility or leasing deposit.

A poor credit rating indicates a high risk of defaulting on a loan, and thus leads to high interest rates, or the refusal of a loan by the creditor.

Credit rating agencies in India

• Credit Rating Information Services of India Limited (CRISIL)
• Investment Information and Credit Rating Agency of India (ICRA)
• Credit Analysis & Research Limited (CARE)
• Duff & Phelps Credit Rating India Private Ltd. (DCR India)
• ONICRA Credit Rating Agency of India Ltd.

Ratings awarded by major credit rating agencies:

• AAA : Highest Safety
• AA : High Safety
• A : Adequate Safety
• BBB : Moderate Safety
• BB : Sub -moderate Safety
• B : Inadequate Safety
• C : Substantial Risk
• D : Default