Different Credit Rating Agencies

A bill was passed to form the first Indian credit rating agency in August 2016 and it was registered in January 2017, according to the Credit Rating Agencies (National Oversight) Act, 2005. The agency has been operational since April 2017 and has assigned ratings on commercial paper issued by Indian companies and other organizations. There are three credit rating agencies in India: CRISIL (CIBIL) with an Aa2 rating from Moody’s; ICRA with Aa3 from Moody’s; and Fitch Ratings with AA- from S&P Global Ratings and AA- from Fitch Ratings respectively.

Moody’s Analytics

Moody’s Analytics, the analytics arm of Moody’s Corporation, has recently announced its intention to form a new credit rating agency in India to be known as the Indian Credit Rating Agency (ICRA). In this article, we will examine Moody’s Analytics’ decision and its plans to start an Indian credit rating agency from both Moody’s point of view and from that of the prospective investors and issuers in India’s capital markets.

Indian Credit Rating Agencies

There are many credit agencies in Indian out of which there are two giant credit rating agencies. These are Credit Information Bureau India Ltd. (CIBIL) and ICRA Limited. Both agencies provide global credit ratings for Indian borrowers, in addition to local credit reports on Indian individuals and businesses. This system is a departure from how things were done in past years, as local banks used to be responsible for issuing their reports on loans issued by them. However, with Prime Minister Modi’s government launching its Make in India initiative, it became clear that there was a need for an independent agency that could help aid foreign investors make informed decisions about investing in or partnering with Indian companies – particularly those involved in manufacturing goods for export abroad.

Credit Rating Agency Companies

A credit rating agency is a company that gauges and reports on your creditworthiness. Three main companies fall into that category: FICO, VantageScore, and Experian. Each has its way of determining credit scores and uses different mathematical formulas to calculate them; they all rely on one or more of these five categories: payment history, debt-to-income ratio, length of credit history, types of credit used, and age/newness of credit accounts. Generally speaking, each category carries slightly more weight than another.

Ways to Improve Credit Score

The easiest way to improve your credit score is by paying off high-interest debt. Credit card interest rates average between 15 and 25 per cent, while most personal loans range from 8 to 14 per cent. That’s right: It’s easier to pay off a $10,000 loan at 10 per cent interest than it is to pay down a $3,000 credit card balance at 20 per cent interest. It also makes sense from a purely mathematical perspective—paying down credit cards boosts your available credit limit, allowing you to charge more money without negatively affecting your credit score. In addition to using any windfalls wisely (paying down debt in full or saving for retirement), stick with no-fee credit cards so you can build up good habits that improve your financial health in general.

How does it affect my life?

Credit rating agencies have been around for many years. This is because having a credit score influences your ability to qualify for a loan, as well as get cheaper interest rates on loans you do take out. It also can affect how much you pay on insurance and even how much rent you pay. The credit rating agencies in India that generate these scores work hard to make sure they accurately reflect your ability to repay debts over time while protecting creditors from high-risk debtors. However, many experts believe credit ratings should be used more frequently in business transactions rather than only with personal debts.

Credit Rating Agencies In India

India has an excellent credit rating system in place, and several agencies handle a variety of different things. The most popular agency is CRISIL (Credit Information Services of India Limited), which has been around since 1976 and ranks financial instruments based on their level of risk. It was initially created to help banks manage risks, but now its services have expanded beyond that to include financial instruments from companies as well. Experian is another great resource for credit ratings in India, although it’s more focused on providing information about individuals and businesses than ranking company-specific issues as CRISIL does. However, Experian does give users a chance to check their credit scores through an online portal for free every month.

Conclusion

Developing and maintaining good credit can be a huge asset to any person or business in today’s global economy. However, just because you’re developing and maintaining good credit doesn’t mean that you have the same credit score as your best friend, or that the scores you receive from one credit rating agency are comparable to those from another.