Just like individual credit scores are calculated by three bureaus (Equifax, Transunion, and Experian) the credit scores of countries are also rated by three agencies (Standard & Poor’s, Moody’s, and Fitch). While both individuals and sovereign states both borrow money, the way scores are recorded are very different.
Individual credit scores range from 350 to 850, with anything higher than 780 considered very good. Credit ratings for countries are usually recorded using letters, pluses and minuses, and numbers.
With the US credit rating (or credit score) being downgraded by Standard and Poors from AAA to AA+, it’s much like having an individual credit score decline from 850 to 820, maybe 800. What really makes things worse is that the “outlook” is considered negative, meaning the rating could easily worsen.
What does this mean for the average person? Not a whole lot. Your personal financial situation is still more dependent on your ability to:
- Make extra money.
- Control your personal expenses so that you spend less than you earn.
- Stay out of high interest debt (move your credit card debt to a long duration zero percent balance transfer card like the Discover® More Card).
- Save money and invest it properly.
- If you buy a home, make certain your mortgage is specifically designed for your personal situation (check with Quicken Loans).
What are other countries credit ratings? These are the latest ratings I could find on 33 countries and obviously are subject to change.
|Country||Moodys Rating||Moodys Outlook||Fitch Rating||Fitch Outlook||S & P Rating||S & P Outlook|