Rating

An assessment of the likelihood that a company, government or individual will repay their debts in full and on time. In securities trading debts such as bonds are ranked by the rating agencies on the basis of their previous financial history and their current stability in the market. The better the rating, the lower the chance a debt default is thought to be and the easier and cheaper it is to borrow money. Individuals are also rated by credit reference agencies with county court judgements, missed payments, bankruptcy orders and excessive applications for credit products all leaving a black mark on their credit file.

This definition is for general information purposes only