What is the credit rating meaning of AAA or AA credit rating; BBB and BB, BA, CA, CAA, etc – and how is credit rating explained?
Answer:How do you know whether to invest in securities of a country or corporation? This is what the credit rating meaning is of AAA or AA, BBB and BB, Ba, Ca, Caa, or CCC, etc credit rating notations. The credit rating is explained basically by intuition - the A credit denotes lowest risk, the C and D are the highest risk and totally unacceptable for investors.
Who does the credit rating for corporations and how is credit rating explained?
Similar to consumer credit rating agencies such as Experian and Equifax, there are agencies evaluating the corporate world. Moody's, Standard & Poor's (S&P's) and Fitch IBCA are the top corporate credit rating agencies worldwide. They use slightly different credit notations, but it is clear that AA is better than Baa. To explain credit rating, refer to the table below:
| Credit Rating by Moody's | Credit Rating by Standard & Poor's | Risk |
|---|---|---|
| Aaa | AAA | Great investment, lowest risk. |
| Aa | AA | |
| A | A | |
| Baa | BBB | Medium risk, acceptable investment. |
| Ba | BB | High risk, junk. |
| B | B | |
| Caa | CCC | Highest risk, junk. |
| Ca | CC | |
| C, D | C, D | In default. |
The credit rating meaning assigned by raters to governments and corporations can be short or long term and reflect the ability of the entity to repay its debt obligations. Governments who tend to pay obligations in their own currency score lower in credit rating than those paying foreign-currency obligations.
Our advice: Be sure to ask your lender about FHA loans. FHA loans have very competitive interest rates because the loans are insured by the US Federal Government. Even if you have had serious credit problems, such as bankruptcy, it is easier to qualify for an FHA loan than a conventional loan. Also, taking an FIXED rate loan while the interest rates are still low is a smart idea. Check your eligibility here:
| Not at all | Definitely |
Mortgage QnA is not a common forum. We have special rules:
- Post no questions here. To ask a question, click the Ask a Question link
- We will not publish answers that include any form of advertising
- Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
Common misspellings: mortage and morgage