What is a credit rating agency? Name two examples.

A credit rating agency is an organization that evaluates the creditworthiness of individuals, companies, or governments by analyzing their financial history, repayment capacity, and risk factors. The agency assigns a credit rating, usually in the form of letters or symbols, which helps investors and lenders decide whether to provide credit or invest. A high rating indicates lower risk, while a low rating signals higher risk. Credit rating agencies play an important role in maintaining trust in the financial system by providing independent and unbiased evaluations. They use various financial data, market trends, and economic indicators to prepare reports. Two well-known examples of credit rating agencies are CRISIL (Credit Rating Information Services of India Limited) and ICRA (Investment Information and Credit Rating Agency).