Dr. Kashani Kia, Credit rating [1] and accreditation [2] are both used to assess the credit value of individuals [3]. In both processes, the appraiser measures the probability of default on the part of the creditor, and the output of both approaches leads to greater knowledge and more accurate decision-making to interact with the creditor. Whereas the terms credit rating and credit rating are sometimes misused by non-experts due to their verbal similarity, and sometimes even monetary and banking experts do not have a correct understanding of these two concepts; Here are some differences between credit rating and credit rating.

Credit ratings are commonly used to evaluate large companies and countries, while credit ratings are used to evaluate individuals and small and medium-sized companies.

Credit rating output is a credit report containing operational and financial details that are ultimately summarized in the credit rating and are usually a combination of a few English letters; Validation output, on the other hand, includes a credit score and is usually indicated by a number.

In the rating, the credit rating agency decides based on the opinion of its experts and experience which general or confidential information is considered in the credit rating and how to analyze and evaluate. However, in accreditation, the output is calculated based on the accreditation model and the opinion of experts is applied only in the model design stage and not as a result of the accreditation of each applicant.

In ranking, the quantitative and qualitative information of companies is evaluated by the credit rating agency. This information can have a wide and different range depending on the type of company or industry concerned. In general, credit rating is determined based on industry analysis, financial analysis, managerial evaluation and fundamental analysis of company information, including analysis of liquidity management, asset quality, profit and interest, etc. But in validation, a predetermined model is used based on a set of studied variables, which is based on data refinement.

Credit report extraction and credit rating, which are the output of the rating process, are usually time consuming and take several weeks, while the credit score that results from the validation is received instantly.

 

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