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How a Credit Score Downgrade Impacts Your Life

Why do credit score ratings play such an essential role in our everyday lives?  Credit ratings are essential because they indicate how likely an individual, a business, a city, a county, a state, or even a country is able to repay a debt. Each one of these entities has a credit rating and depending on positive or negative factors, a rating can be upgraded or downgraded.

For example, the U.S. had always maintained a top tier AAA credit rating. But recently, one of the major credit-rating agencies, Standard & Poor, downgraded our country’s credit rating for the first time.

As a result, America’s cost of borrowing increased by billions of dollars per year, which inevitably impacts consumers through higher interest rates and borrowing costs.

 

 

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William Case

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