Before debt issuers lend money to a company or government entity, they usually want to gauge the track record of the borrower. One way to do this is through the use of credit ratings. Common credit rating agencies that help assess an entity’s credit worthiness include Moody’s Investor Services, Standard and Poor’s (S&P), and Fitch Group. Credit ratings are different from credit scores, which are issued to everyday consumers. While credit ratings use letter grades to assess a company or government entity, credit scores use numbers to assess individuals. Keep reading to learn more about what a credit rating is, the types of credit ratings that exist, and how credit rating agencies work. How Do Credit Ratings Work? A credit rating is a type of score determined by a credit rating agency that assesses whether an entity is capable of paying back their debts within an agreed timeline. The primary goal of a credit rating is to measure the risk involved when lending money to a company or government entity. The rating can help a borrower determine how likely that entity is to default on