Beyond numbers: Unravelling the art and science of credit ratings

In today’s financial landscape, credit ratings are pivotal in assessing credit risk, providing a common language for decision-makers in lending and investment. As global markets face heightened uncertainty and interest rates, understanding creditworthiness is paramount, mandated by tax jurisdictions worldwide as per OECD guidelines.

This paper explores the intricacies of credit ratings, examining methodologies and rating types. From top-down to bottom-up approaches, we delve into the art and science of credit ratings, offering practical insights to enhance their application in real-world scenarios, facilitating informed decision-making and risk management.