...is a country's credit rating really that serious?
By jeanneyvonne
@jeanneyvonne (5501)
Philippines
January 8, 2013 8:07am CST
I'm gettign interested in my country's economy and I'm plunging in to make a stake in economics even though I only understand the basic concepts. however, I'm really curious about this credit rating. I understand that it like a reputation when it comes to borrowing money from international lending entities and three agencies give the said ratings. However, I am more interested if this really have an effect to a country's economic future. I heard some people as individuals are really taking care when it comes to their credit rating so that perhaps they can borrow more money. Is that the same with countries? And why do some countries don't care if their ratings slumps? Does that mean they aren't borrowing anymore?
If anyone spots a mistake, I would like to be corrected. this one is one of my waterloos.
3 responses
@eglendine (21)
• United States
9 Jan 13
The credit rating goes into the decision making progress. The credit rating shows how risky it is to loan the American Government money. It shows how likely we are to pay back the treasury bond. Better the credit rating, easier it is for other countries and private investors to lend the American Government money. Is it the straw that breaks camels back when it comes to a decision, probably not. But it goes into the thought process.
@jeanneyvonne (5501)
• Philippines
9 Jan 13
I see. Thanks for expounding on this.I guess this is really a big thing for foreign investors and if they gnat to invest into a foreign market or bonds.
@Suebee (2013)
• Canada
8 Jan 13
I don't know all that much about world finances but one thing I DO know. I live in Canada and when the U.S. had it's credit rating dropped I lost over $30,000 Canadian!!
@jeanneyvonne (5501)
• Philippines
9 Jan 13
That's a lot of cash. And just probably in a short amount of time.
@Arieles (2473)
• United States
8 Jan 13
I've been listening a lot to Dave Ramsey, and I'm under the impression that a credit rating isn't all that important. Initially, yes a negative rating is something no one desires, but if you have a cash flow and some savings, a credit rating isn't really going to affect you all that much. As far as the country, I am not sure about that one. I think the "country" should be an example to it's people. We should desire a higher credit rating. If we have a negative credit rating, it will have an impact on the people that live in the country.
