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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. The credit rating is used by individuals and entities that purchase the bonds issued by companies and governments to determine the likelihood that the government will pay its bond obligations. A poor credit rating indicates a credit rating agency's opinion that the company or government has a high risk of defaulting, based on the agency's analysis of the entity's history and analysis of long term economic prospects.

Credit rating agencies:The largest credit rating agencies (which tend to operate worldwide) are Moody's, Standard & Poor's, Fitch Ratings DBRS.

Other agencies and rating companies:-

Agusto & Co. (Nigeria), A. M. Best (U.S.), Credit Rating Information and Services Limited(Bangladesh), Dun & Bradstreet (U.S.), Egan-Jones Rating Company (U.S.), Global Credit Ratings Co. (South Africa), ICRA Limited (India),

Japan Credit Rating Agency, Ltd. (Japan), Levin and Goldstein (Zambia), Morningstar, Inc. (U.S.), Muros Ratings (Russia, alternative rating company), Public Sector Credit Solutions(U.S., not-for profit rating provider), Rapid Ratings International (U.S.), Veda (Australia, previously known as Baycorp Advantage), Wikirating (Switzerland, alternative rating organization).

What Is a Good Credit Score?

Different Credit Scoring Systems: A good credit score depends on the scoring system used by your particular lender. Different scoring systems use different scales. However, if you have a good credit score from one of the credit reporting agencies, you are likely to have a good credit score with your lender. Most credit scores fall between 600 and 750 A score above 700 usually suggests good credit management

What Impacts a Credit Score? The information that impacts a credit score varies depending on the score being used. Credit scores are affected by elements in your credit report, such as: Number and severity of late payments Type, number and age of accounts Total debt Public records

How a Good Credit Score Is Determined Developers of credit scoring models do the following: Review the historical credit profiles of a set of consumers (often more than 1 million) Examine the profiles to identify common variables Build statistical models based on the credit variables that best predict future behavior Assign appropriate weights to each variable

The biggest driving factor to a score is delinquency payments or payment history, explained Arlene Dang, Manager of Analytics for Experian.

Rating Agencies in India:The Indian credit rating industry has evolved over a period of time. Indian credit rating industry mainly comprises of CRISIL, ICRA, CARE, ONICRA, FITCH & SMERA. CRISIL is the largest credit rating agency in India, with a market share of greater than 60%. It is a full service rating agency offering its services in manufacturing, service, financial and SME sectors. SMERA is the rating agency exclusively established for rating of SMEs.

Small and Medium Enterprises Rating Agency (SMERA):SMERA a joint initiative by SIDBI, Dun & Bradstreet Information Services India Private Limited (D&B) and several leading banks in the country. SMERA is the country's first Rating agency that focuses primarily on the Indian MSME segment. SMERA has completed 7000 ratings.

CRISIL:CRISIL is the largest credit rating agency in India. It was established in 1987. The worlds largest rating agency Standard & Poor's now holds majority stake in CRISIL. Till date it has rated more than 5178 SMEs across India and has issued more than 10,000 SME ratings.

CARE Ratings:corporated in 1993, Credit Analysis and Research Limited (CARE) is a credit rating, research and advisory committee promoted by Industrial Development Bank of India (IDBI), Canara Bank, Unit Trust of India (UTI) and other financial and lending institutions. CARE has completed over 7,564 rating assignments since its inception in 1993.

ONICRA Credit Rating Agency:ONICRA was established in 1993 by Mr. Sonu Mirchandani as a rating agency. It analyzes data and provides rating solutions for Individuals and Small and Medium Enterprises(SMEs). ONICRA has an extensive experience in operating a wide range of business processes in areas such as Finance, Accounting, Back-end Management,

Application Processing, Analytics, and Customer Relations. It has rated more than 2500 SMEs.

Fitch Ratings:Fitch Ratings is a global rating agency committed to providing the world's credit markets with independent and prospective credit opinions, research, and data. Fitch Ratings is headquartered in New York and London and is part of the Fitch Group.

ICRA:ICRA was established in 1991 by leading Indian financial institutions and commercial banks. International credit rating agency, Moodys, is the largest shareholder. ICRA has a dedicated team of professionals for the MSME sector and has developed a linear scale for MSME sector which makes the benchmarking with peers easier.