Question

Consider the following about Credit rating agencies:

1. They are government agencies which evaluate credit worthiness of a client or company
2. CRISIL is an international credit rating agency.

Which of the above are correct?

• A.
  1 only
• B.
  1 only
• C.
  Both 1 and 2
• D.
  None of the above

Answer 1

The correct option is D

None of the above
A credit rating is a quantified assessment of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation. Credit ratings determine not only whether or not a borrower will be approved for a loan or debt issue but also the interest rate at which the loan will need to be repaid. A credit rating or score can be assigned to any entity that seeks to borrow money an individual, a corporation, a state or provincial authority, or a sovereign government. Credit assessment and evaluation for companies and governments is generally done by a credit rating agency such as S&P Global, Moody’s, or Fitch Ratings. These rating agencies are paid by the entity that is seeking a credit rating for itself or one of its debt issues. CRISIL, India's first credit rating agency.