A Credit Rating Agency is a company that evaluates the creditworthiness of borrowers, including governments and corporations. They assign ratings based on the likelihood that these entities will repay their debts. These ratings help investors make informed decisions about lending money or purchasing bonds. The most well-known Credit Rating Agencies include Moody's, Standard & Poor's, and Fitch Ratings. Their assessments influence interest rates and investment strategies, as higher ratings typically lead to lower borrowing costs. These agencies play a crucial role in the financial markets by providing transparency and helping to assess risk.