Smart things to know about credit ratings

1. Credit rating is a symbol that denotes the creditworthiness of the security being rated. AAA is the highest whereas D stands for Default.

2. Credit ratings are assigned to fixed income securities such as corporate bonds, fixed deposits, commercial paper, certificates of deposits and municipal bonds, as well as bank loans of companies.

3. Credit ratings can be provided only by specialised organisations that have been approved and authorised by Sebi. Some of the rating agencies are CRISIL, ICRA, CARE etc.


4. Once assigned and published, the credit rating is made public and is available free of cost.

5. A credit rating indicates the likelihood of timely payment of interest and principal by the rated security and is a measure of credit risk or risk of default.

(The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)