what happens when a credit rating drops 
a lower credit rating means that credit agencies believe the borrower is becoming more risky either due to a higher level of debt falling income or other causes that make the borrower less able to pay their obligations these borrowers will need to pay higher interest rates to make up for the increased risk to lenders the bottom lineratings are used to assess the quality of an investment such as a stock or bond analysts issue ratings for different instruments based on the risks and opportunities associated with a particular investment there are several different ratings agencies with their own systems for evaluating risk and opportunity 