Credit rating agencies (CRAs) are the gatekeepers of the global debt market. They evaluate the financial health of bond issuers — governments, corporations, and institutions — and assign ratings that tell investors how likely they are to get their money back.
The "Big Three" — Moody's, S&P Global, and Fitch — control over 95% of the global ratings market. Their scales run from AAA/Aaa (safest) to D (default). A single downgrade can cost a borrower millions in higher interest costs. In India, CRISIL (S&P subsidiary), ICRA (Moody's affiliate), and CARE are the major agencies.
CRAs faced massive criticism after the 2008 crisis for giving AAA ratings to toxic mortgage-backed securities. Critics call it a conflict of interest — the issuer pays the agency for the rating (like a student paying the teacher to grade their exam). Post-crisis reforms increased oversight, but the fundamental "issuer pays" model remains.