How Do Credit Rating Agencies, Like Standard And Poors, Work?

We’ve been hearing a lot about rating agencies, and Standard and Poors in particular. You might have the general idea that the ratings they give bonds are a lot like your credit score. The lower the bond rating, the lower the credit score, the harder and more expensive it is to borrow money. But how exactly do these places work? And how might their judgment be corrupted? Marketplace’s Paddy Hirsch explains in this video using his trusty whiteboard and dry-erase marker.

How credit agencies work