In the United States, CRAs have been closely investigated by SEC over their roles in current economic crisis and the same is happening in Australia. This implies that there has been something wrong in the way CRAs carry out ratings. Credit rating agencies are mainly used to rate individuals.
A credit rating is used to measure the ability and the willingness of a given borrower in repaying debts. Credit rating gives the credit worth of a borrower. Credit rating agencies are companies or institutions which actually performs and assigns credit ratings (Investing School, 2009; Sack and Juris, 2007).