What are the differences between credit rating agencies?

What are the differences between credit rating agencies?

Credit rating agencies assess the creditworthiness of entities. The main agencies are Moody's, S&P, and Fitch, each with unique methodologies.

How do their rating scales differ?

Moody's uses a scale from Aaa to C, while S&P uses AAA to D. Fitch's scale is similar to S&P's, but they may have different criteria for ratings.

Why do some companies have different ratings from different agencies?

Differences in ratings can arise from varying methodologies, data interpretations, and the weight given to certain financial metrics by each agency.

Which agency is considered the most reliable?

Reliability can be subjective, but many investors trust Moody's and S&P due to their long-standing reputations and comprehensive analysis.

How often do these agencies update their ratings?

Agencies typically review ratings regularly, but updates can occur anytime based on significant financial changes or events affecting the rated entity.