Credit Rating
A credit rate determines the applicants’ level of credit limit they are allowed to apply for. Credit limits vary across credit issuers, as some are more lenient than others. However, the credit score generally gives the institution an indication of how reliable a credit applicant is of paying their dues on time after being granted the credit they had applied for.
The following Credit Rating Scale is considered in Universal Fiscal Terms:
- AAA → Highest credit quality
- Ratings of 'AAA' indicate the lowest risk of default. They are only assigned in circumstances where a person's ability to pay financial obligations is particularly strong. Predicted occurrences are unlikely to harm this capability.
- AA → Very High Credit Quality
- Expectations of very low default risk are indicated by an AA rating. They show that you have a lot of money and can pay your debts on time. This capability isn't particularly vulnerable to situations that can be predicted.
- A → High Credit Quality
- A' grades indicate a low likelihood of default. The ability to meet financial obligations is regarded as strong. Nonetheless, this capacity may be more subject to unfavorable business or economic situations than higher grades.
- BBB → Good Credit Quality
- The BBB grade indicates that the danger of default is now minimal. Although the capacity to pay financial obligations is considered adequate, poor business or economic situations are more likely to erode it.
- BB → Speculative
- BB' ratings indicate a high risk of default, particularly if a business or economic conditions deteriorate over time; but, there is sufficient business or financial flexibility to enable the servicing of financial commitments.
- B → Highly Speculative
- B ratings indicate that there is a considerable risk of default, but there is only a small margin of safety. Financial commitments are now being honored; but, the business and economic situation may deteriorate, putting the capacity for continued payment at risk.
- CCC → Substantial Credit Risk
- Default is highly possible
- CC → Very high levels of credit risk
- Default of some sort appears to be a distinct possibility.
- C → Near Default
- A default or default-like process has begun, or the issuer is at a standstill, or payment capability for a closed financing vehicle has been irreversibly harmed.
- RD → Restricted Default
- RD' ratings indicate that an issuer has had an uncured payment default or distressed debt exchange on a bond, loan, or other material financial obligation, but has not filed for bankruptcy, administration, receivership, liquidation, or other formal winding-up procedure, and has not otherwise ceased operations, in Fitch's opinion.
- D → Default
- Fitch assigns a D rating to an issuer that has filed for bankruptcy, administration, receivership, liquidation, or another formal winding-up proceeding, or has otherwise discontinued operations.