Credit Rating Agency

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Credit Rating Agency

A company that provides investors with assessments of an investment's risk. The issuers of investments, especially debt securities, pay credit rating agencies to provide them with ratings. A high rating indicates low risk and may therefore encourage investors to buy a security. Additionally, banks may only invest in securities with a high rating from two or more credit rating agencies. The SEC recognizes 10 firms as credit rating agencies; Fitch, S&P, and Moody's are the three most prominent. However, the methods of credit ratings agencies have been subject to criticism. For example, most agencies gave high-risk mortgage-backed securities top ratings until they defaulted at the collapse of the housing bubble.
References in periodicals archive ?
The credit reporting agencies all have detailed procedures for correcting errors.
Online credit reporting firm Credit Reporting Agency said the move should make people more aware of the information held about them and should help reduce errors.
Then she contacted all three of the national credit reporting agencies and had a fraud alert put on her record to prevent the thieves from obtaining credit elsewhere.
Creditors and credit reporting agencies work diligently to maintain accurate records, but with millions of updates made each day, mistakes can happen.
The FACT Act, among other things, extended provisions governing the credit reporting system and addressed ongoing concerns about inaccuracies in credit reports.
In 2002, a joint study conducted by the Consumer Federation of America and the National Credit Reporting Association found evidence that the information included in credit reports of any given individual can differ widely across agencies.
As a result, the federal government has made sweeping changes and additions to the Fair Credit Reporting Act (FCRA).
It is calling for a strong national law on credit reporting that would still allow U.
The federal Fair Credit Reporting Act is designed to protect the privacy of consumer report information and to guarantee that the information supplied by credit-reporting agencies is as accurate as possible, according to the Federal Trade Commission's October 1998 publication: Consumer Reports: What Insurers Need to Know.
An employee or potential employee must grant permission for an employer to check their credit, according to The Fair Credit Reporting Act.
Twenty-two percent of Americans have never checked their credit report to verify the accuracy of the information, even though by law, credit reporting agencies are required to provide free copies upon request.
Reports are tracked by the three major credit reporting agencies: Equifax, Experian and Trans Union.