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 other six types of companies were credit reporting agencies, banks, mortgage brokers, online trading platforms, hedge funds and private equity funds, and credit card companies.
Senator Bob Menendez, a senior member of the Senate Banking Committee, today announced updated legislation to strengthen protections for consumers personal data, provide them with greater privacy rights and establish reasonable accountability measures for businesses and credit reporting agencies that fail to safeguard consumers personal information.
Equifax is one of three major credit reporting agencies in the US, along with TransUnion and Experian, and provides credit score reporting and monitoring services.
A free report from each of the credit reporting agencies -- Equifax, Experian and TransUnion -- is available once every 12 months at AnnualCreditReport.
Credit reporting agencies are private businesses that track consumers' credit histories and other transactions.
The company says it's taken "additional security measures" to block any future such attacks, and is working with card issuers and credit reporting agencies to identify and resolve any fraudulent usage.
The board also approved rules that clarify what information credit unions must disclose to credit reporting agencies and gave consumers the right to challenge an item on the report directly with a creditor rather than having to go through the credit reporting agency.
Credit reporting agencies also can provide a limited amount of identity theft insurance and access to fraud specialists.
Credit card companies can do little more than report your payment history to credit reporting agencies, resulting in a negative credit history.
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.