Investing Dictionary
Options & Bonds

What is Credit Rating?

A grade for how likely a borrower is to repay their debt

Full Explanation

Agencies like Moody's, S&P, and Fitch rate bonds from AAA (safest) to D (in default). Higher-rated bonds pay lower interest. Junk bonds (below BBB) pay higher interest because they're riskier.

Pro Tip

If a company's credit rating gets downgraded to junk, its stock usually tanks and borrowing costs spike.

Related Options & Bonds Terms

Expiration Date

The last day an option can be used

Covered Call

Selling someone else the right to buy your stock at a higher price

Call Option

A contract giving you the right to buy a stock at a set price

Put Option

A contract giving you the right to sell a stock at a set price

View all Options & Bonds terms →

Track Real Stocks on Mr. Guy Invests

Free portfolio tracker, AI tutor, hedge fund tracker, everything explained in plain English.

Create Free Account

Free forever. No credit card needed.