Where to find bond ratings

A credit rating is a useful tool not only for the investor but also for the entities looking for investors. An investment-grade rating can help a security, company, or country attract both domestic and foreign investments.

For emerging market economies , a solid credit rating is critical to demonstrating their creditworthiness to foreign investors. Also, a better rating typically means a lower interest rate, reducing the chances of default in a rising rate environment. Securities and Exchange Commission. Bank for International Settlements. Accessed May 31, Fitch Ratings. Moody's Investor Service. International Monetary Fund.

Government Printing Office. The World Bank. Fixed Income Essentials. Mutual Funds. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page.

These choices will be signaled globally to our partners and will not affect browsing data. We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Key Takeaways A corporate credit rating is a numerical assessment of a company's creditworthiness, measuring the likelihood of it defaulting on its debt. Corporate credit ratings are issued by rating agencies and help investors determine the riskiness associated with investing in a corporate bond.

Corporate credit ratings can range from the highest credit quality on one end to default or "junk" on the other. Article Sources. Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts.

We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy. Compare Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Bond ratings are assigned to both the organizations that issue bonds and the bond issues themselves.

Ratings can also provide an incentive to organizations to stay current with their debts and not take on more debt than they can comfortably afford. On the investor side, bond ratings provide important information about the riskiness of various investments.

Whether you are only comfortable purchasing investment-grade bonds or you are willing to take a calculated risk by purchasing junk bonds, having the ratings assigned by the agencies provides another important metric you can use to decide which investments are right for you.

Though having access to these bond ratings can be very helpful to investors, they are not without flaws. To start, bond rating agencies are privately owned companies, and bond issuers pay the agencies to rate them. This presents a potential conflict of interest, and investors should always keep this fact in mind when using information from rating agencies.

Many experts advise investors to use ratings as just one piece of information for deciding where to invest, rather than the only piece of information. Additionally, since the methodology for rating securities and their issuers is proprietary, it is not always clear why and how the agencies assign their ratings.

The evaluation methodology used by rating agencies may also fail to foresee coming problems, as happened in Each of the three major rating agencies gave high ratings to the kinds of mortgage-backed securities that proved to be far riskier than their ratings indicated.

Investors who trusted in these ratings were often then overexposed to securities that contributed to the housing bubble correction that year. Emily Guy Birken is a former educator, lifelong money nerd, and a Plutus Award-winning freelance writer who specializes in the scientific research behind irrational money behaviors.

Her background in education allows her to make complex financial topics relatable and easily understood by the layperson. With two decades of business and finance journalism experience, Ben has covered breaking market news, written on equity markets for Investopedia, and edited personal finance content for Bankrate and LendingTree.

Select Region. United States. United Kingdom. Emily Guy Birken, Benjamin Curry. Contributor, Editor. Editorial Note: Forbes Advisor may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations. What Are Bond Rating Agencies? Audio Track. Reset restore all settings to the default values Done.

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