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An assessment of the creditworthiness of a borrower, typically assigned by rating agencies like Moody's, S&P Global, and Fitch.
Credit ratings range from AAA (highest quality, lowest default risk) down to D (in default). Ratings of BBB-/Baa3 and above are considered investment grade, while anything below is classified as high yield or "junk." These ratings directly affect borrowing costs: a company rated AA might pay 4% on bonds while a BB-rated company might pay 7% for the same maturity. Sovereign credit ratings assess countries and influence their cost of borrowing. Rating downgrades can trigger forced selling by institutional investors with investment-grade-only mandates.