What is the credit agency?
The credit agency is a company that lays down issuers of different credit debts. In this sense, issuers may refer to local or state governments, non -profit organizations, national governments and some private entities. Credit ratings are based on credit rank of issuer, which in turn affects the total interest rate of the issuer. However, companies that do not have ideal financial results often suffer from a bad rating. In both cases, the evaluation that is given to the credit agency is decisive.
Some of the larger credit agencies include Fitch, Standard & Poor's and Moody's. Credit agencies can be found in almost every country, and most agencies largely affect the total value of the company. Credit agencies carefully monitor the credit rating of large enterprises and credit ratings can great fluctuations throughout the life of the company.
Investors, banks, brokers and governments are all relying on the evaluation of the credit agency. By investigating a loanInvestors can determine the company's overall credit risk. In addition, issuers look at their own credit rating to determine the value of their company. Credit evaluation allows issuers to analyze their company's effectiveness and control the tools and values of the company. The credit agency also has the ability to play a major role in structured financial transactions.
credit rating determine interest rates associated with a structured financial transaction. It is not uncommon for the company to consult with a loan agency to achieve a sought -after credit rating. While the credit evaluation has proved to be useful in many ways, credit agencies are also a topic of a big debate.
Criticism of the Credit Agency Agency The fact that most credit agencies do not respond quickly enough to reduce the company. Other critics include the idea that some credit AGENtures have close relations with different businesses and that bad rating has the ability to create a massive impact on the economy as a whole.
It is also possible for credit agencies to make errors concerning the earned evaluation of the company. This is particularly common in terms of the company's structured products. If this type of agency's mistake occurs, many banks rely on accurate credit rating are adversely affected.