Asian Business Press

Posts Tagged ‘Credit rating’

There are a few reputable high-end accounting and legal firms that will assist you in legitimately creating and building your corporate credit. The fact that this process takes months is to their advantage. There is nothing that lawyers and accountants love better than projects that take months (or years). They LOVE billing you monthly for their services!

Building your corporate credit is simple is you follow a systematic, step-by-step process. Given a reasonable amount of time, your new corporation will be granted credit, regardless of your personal credit rating. Your FICO score will become separate from that of your corporation.

Stop the frustration of trying to build your business while dealing with small minded lenders.

Learn the SECOND set of corporate credit rules that your local lender, hiding behind the desk, isn’t comfortable with.

“How Long At Current Address” and “Proof Of Employment” are the questions that come from small-thinking personal credit lenders. Ask yourself, “How long would Donald Trump put down for “time at current address”? After all, he moves to new million dollar accommodations every few months!

At sometime during it’s evolution EVERY business will need some financing! Doesn’t it make sense for you to start building your corporate credit NOW, before your business really needs it.

Sovereign Credit Ratings
As previously mentioned, a rating can refer to an entity’s specific financial obligation or to its general creditworthiness. A sovereign credit rating provides the latter as it signifies a country’s overall ability to provide a secure investment environment. This rating reflects factors such as a country’s economic status, transparency in the capital market, levels of public and private investment flows, foreign direct investment, foreign currency reserves, political stability, or the ability for a country’s economy to remain stable despite political change.

Because it is the doorway into a country’s investment atmosphere, the sovereign rating is the first thing most institutional investors will look at when making a decision to invest money abroad. This rating gives the investor an immediate understanding of the level of risk associated with investing in the country. A country with a sovereign rating will therefore get more attention than one without. So to attract foreign money, most countries will strive to obtain a sovereign rating and they will strive even more so to reach investment grade. In most circumstances, a country’s sovereign credit rating will be its upper limit of credit ratings.

Conclusion
A credit rating is a useful tool not only for the investor, but also for the entities looking for investors. An investment grade rating can put a security, company or country on the global radar, attracting foreign money and boosting a nation’s economy. Indeed, for emerging market economies, the credit rating is key to showing their worthiness of money from foreign investors. (To read more, see What Is An Emerging Market Economy?) And because the credit rating acts to facilitate investments, many countries and companies will strive to maintain and improve their ratings, hence ensuring a stable political environment and a more transparent capital market.

There are three top agencies that deal in credit ratings for the investment world. These are: Moody’s, Standard and Poor’s (S&P’s) and Fitch IBCA. Each of these agencies aim to provide a rating system to help investors determine the risk associated with investing in a specific company, investing instrument or market.

Ratings can be assigned to short-term and long-term debt obligations as well as securities, loans, preferred stock and insurance companies. Long-term credit ratings tend to be more indicative of a country’s investment surroundings and/or a company’s ability to honor its debt responsibilities.

For a government or company it is sometimes easier to pay back local-currency obligations than it is to pay foreign-currency obligations. The ratings therefore assess an entity’s ability to pay debts in both foreign and local currencies. A lack of foreign reserves, for example, may warrant a lower rating for those obligations a country made in foreign currency. It is important to note that ratings are not equal to or the same as buy, sell or hold recommendations. Ratings are rather a measure of an entity’s ability and willingness to repay debt.

Before you decide whether to invest into a debt security from a company or foreign country, you must determine whether the prospective entity will be able to meet its obligations. A ratings company can help you do this. Providing independent objective assessments of the credit worthiness of companies and countries, a credit ratings company helps investors decide how risky it is to invest money in a certain country and/or security.

Credit in the Investment World
As investment opportunities become more global and diverse, it is difficult to decide not only which companies but also which countries are good investment opportunities. There are advantages to investing in foreign markets, but the risks associated with sending money abroad are considerably higher than those associated with investing in your own domestic market. (For more insight, see Pros And Cons Of Offshore Investing.)It is important to gain insight into different investment environments but also to understand the risks and advantages these environments pose. Measuring the ability and willingness of an entity – which could be a person, a corporation, a security or a country – to keep its financial commitments or its debt, credit ratings are essential tools for helping you make some investment decisions.

Debt consolidation is not a loan. It is a process that works with a representative of Debt Repayment negotiating with your creditors on your behalf to reduce interest rates and may even be able to have fines and penalties reduced.

The consolidation of debt is not a loan. With its accounts of all updated, it will begin making one lower monthly payment that allows you to pay off debts in just 3-6 years!

A program of consolidation of the debt immediately renew your credit rating? No, but you can improve your payment history and put you on the path toward a future free of debt.

The consolidation of debts allows you to pay your current debts in an average of 3.6 years. Paying only the minimum monthly payments of debts it without the help of the consolidation of debt may have to pay the bills for the next 15 to 45 years!