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A rating service is an organization that provides assessments of various entities for an interested audience, such as investors. For example, A.M. Best is a rating service that evaluates the financial strength of insurance companies. On any investor rating service list, Moody’s and Standard & Poor’s would be included as two of the best known in the US. Each rating service sets its own rating scale. For the investor, while the opinion of a rating service is helpful, additional knowledge and expertise can often improve investment decisions. A rating service may be helpful in evaluating a mutual fund, bond, preferred stock, commercial paper, or other debt. The term rating service is sometimes used as another name for a credit bureau, such as Experian, and the other agencies that compute FICO scores. |
