A credit rating is an assessment of an individual's or entity's creditworthiness, which indicates the likelihood of repaying borrowed money. It is typically represented as a letter grade, such as AAA, B, or C, with higher ratings signifying lower risk for lenders. Credit ratings are crucial for obtaining loans, mortgages, and credit cards, as they help lenders decide whether to extend credit and at what interest rate. Credit ratings are determined by credit rating agencies, such as Fitch, Moody's, and Standard & Poor's. These agencies evaluate various factors, including payment history, outstanding debts, and overall financial stability. A good credit rating can lead to better borrowing terms, while a poor rating may result in higher interest rates or difficulty securing loans.