Top Credit Rating Agencies
The credit rating agencies are the primary source of information about a company's ability to repay its debts. Lenders and investors use this information in their decision-making process. Rating agencies also generate ratings for countries, which investors use in assessing the risk of investing.
Lower-rated companies have to pay more interest on their loans, making borrowing money expensive. In addition, a lower credit rating may lead lenders and insurers to raise their rates or refuse to provide services because they believe there is a greater chance that the company will default on its debt payments. After reading this guide, you should have a better understanding of what these credit rating agencies are and how they affect your life:
Fitch Ratings is a credit rating agency that was founded in 1914. It's one of the three largest internationally recognized agencies, and it's headquartered in New York City. Fitch changed its name from Fitch IBCA in December 1998 after acquiring and merging International Bond and Share Society (IBCA) with Fitch Investors Service Ltd.
Fitch Ratings is a global leader in financial information services with operations in more than 30 countries. Fitch Group is comprised of: Fitch Ratings, a global leader in credit ratings and research; Fitch Solutions, an industry-leading provider of credit risk products and services; and Fitch Learning, a preeminent training, and professional development firm. With dual headquarters in London and New York, Fitch Group is owned by Hearst.
Fitch Ratings provides forward-looking credit opinions, as indicated by its ratings, that reflect its expectations of credit behavior over a range of scenarios. The rating process begins when an arranger, issuer, sponsor, or underwriter contacts a member of Fitch's Business Relationship Management (BRM) group with a request to engage Fitch. The BRM will explain the rating process and address any preliminary questions concerning the assignment.
Total assets: $1.7 billion
Moody's Investors Service
Moody's was founded in 1909 by John Moody as a bond credit rating agency. The company has a long history of innovation in credit markets, including the first municipal bond rating scale in 1917 and the first U.S. corporate bond rating scale in 1921.
Moody's shares trade publicly on the New York Stock Exchange under MCO's symbol. It also has an international subsidiary, Moody's Analytics, which provides financial analysis software and risk management services to businesses and government organizations.
Moody's Investors Service is a credit rating agency headquartered in New York City. Moody's Investors Service provides international financial research on bonds issued by commercial and government entities. One of the "Big Three credit rating agencies," the other two being Standard & Poor's and Fitch Group. Moody's Investors Service is the bond credit rating business of Moody's Corporation, representing about 70% of the company's revenue.
John Moody founded Moody's Investors Service in 1909 to produce manuals of statistics related to stocks and bonds and bond ratings for individual issues. Moody set out to offer an opinion on what investment risks were associated with railroad bonds after railroads defaulted on more than $1 million worth of bonds between 1873 and 1875, leading to the financial panic of 1873. In 1975, Moody's became a public company, as it had grown enough that it could no longer remain private under US securities law.
Total Assets: $12.4 billion
Branches: 10 offices located throughout the US
Standard & Poor's
Standard & Poor's, known as S&P, is one of the leaders in credit ratings. It rates companies and governments. S&P's ratings are used by investors and financial institutions around the world. S&P was founded in 1860. The company provides independent opinions about the risk for many investments, including stocks, bonds, and mutual funds.
S&P is a subsidiary of McGraw Hill Financial Inc., formed in 2015 after S&P's parent company McGraw-Hill Cos., merged with financial information provider
CME Group Inc.
The agency rates the creditworthiness of issuers, including corporations and governments, and the overall funds and investment products that they offer. In addition to credit ratings, Standard & Poor's offers investment research and analytics to help investors evaluate their portfolios.
Total Assets: 2.032 billion USD
Branches: over 70 offices in 35 countries
Ways To Get Your Credit Score Up
A low credit score is a significant obstacle to getting a car loan, renting an apartment, qualifying for a mortgage, or even getting a job. The good news is that you can improve your credit score in as little as six months. The information below will help you get started on the road to better credit:
Make your payments on time
Set up autopay or calendar reminders, so you don't forget when bills are due. If you just need a few extra days, call the lender or log in to the website to request an extension. If you're already late, call the lender and ask about a "goodwill adjustment" if it's the first time that's happened.
Don't max out your cards.
Using too much of your available credit can hurt your score. The closer you come to maxing out your card or having one account with a balance near its limit, the more it will affect your score. And don't close old accounts just because they have zero balance — closing old accounts increases your overall credit utilization ratio and can hurt your score.
Build Your Credit File
If you don't already have a credit file — meaning you haven't taken out any loans or applied for a credit card — then start building one as soon as possible. "If you have no credit history at all, then one of the best things that you can do is open a secured credit card," says Todd Albery, CEO of online lending marketplace Upstart. A secured card requires the borrower to put down a deposit that becomes the borrowing limit. It's similar to a debit card in that way, but most secured cards report to the major credit bureaus, so using one responsibly can help your score over time.
Catch Up On Past-Due Accounts
If you're behind on payments with any loan or credit card account, get current first: Make sure all your payments are up to date before taking any other steps. Paying off delinquent accounts also removes them from your report, which should improve your score over time.