why is a credit rating so important 
the level of credit rating that an issuer receives has significant implications on the cost of borrowing in the open market the better the credit rating with aaa being the best the lower the cost to borrow and vice versa as an investor you ll need to balance the risk you re willing to take against the yield you re seeking who decides what credit rating a debt issuer receives there are three major credit rating agencies standard poor s s p moody s and fitch they assess a debt issuer s creditworthiness and ability to pay interest and principal on bonds based on multiple factors such as the company s cash flow the amount of other outstanding debt and the business outlook for the issuer to name just a few criteria 