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A credit rating is an independent evaluation of a borrower's ability and willingness to repay debt, typically expressed as a letter grade (e.g., AAA, BB, etc.). These ratings are issued by credit rating agencies such as Moody’s, S&P Global Ratings, or Fitch. They assess the creditworthiness of entities like governments, corporations, or financial instruments, helping investors gauge the risk level of lending money or investing in those entities. A higher rating suggests lower credit risk, while a lower rating indicates greater risk of default.

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