The Key Difference Between Credit Rating and Credit Score

Credit Rating vs Credit Score
Feature	Credit Rating	Credit Score
Definition	An evaluation of the creditworthiness of a country, corporation, or organization.	A numerical representation of an individual’s creditworthiness.
Subject	Applies to entities like governments, companies, or financial instruments.	Applies to individuals and sometimes small businesses.
Form	Alphabetical ratings such as AAA, BB+, etc.	Numeric score usually ranging from 300 to 850.
Issuing Agencies	Credit rating agencies like Moody’s, S&P, and Fitch.	Credit bureaus like Experian, Equifax, and TransUnion.
Purpose	To inform investors about the risk level of lending to an entity.	To inform lenders about the risk of lending to an individual.
Users	Institutional investors, governments, and banks.	Banks, credit card companies, landlords, and employers.
Factors Considered	Financial statements, debt levels, industry outlook, governance.	Payment history, credit utilization, length of credit history, types of credit.
Update Frequency	Updated periodically based on new financial data or market conditions.	Updated frequently based on credit activity and behavior.
Confidentiality	Publicly available in most cases.	Private; shared only with authorized users or the individual.
Impact	Affects interest rates on government or corporate bonds.	Affects approval and terms of loans, credit cards, and mortgages.
Granularity	Less granular; broad categorization.	Highly granular; each point can matter for approval or rates.
Examples	India: BBB- (Fitch); Apple Inc.: AAA (S&P).	Individual with 750+ score is considered low-risk.
Standardization	Varies slightly among rating agencies.	Generally follows standard FICO or VantageScore models.
Reputation Effect	Strongly influences entity’s reputation in financial markets.	Impacts individual’s financial credibility and borrowing capacity.
Legal Standing	Used in bond issuance and compliance regulations.	Used in consumer finance and underwriting decisions.