I’m a United States citizen. Moody gives the US a AA+ credit rating (it was downgraded from AAA in 2011).
How can this be, despite the substantial amount of debt the US holds that only continues to grow?
Is it GDP, defense capabilities, the dollar being the de facto currency almost worldwide? A combination of these? Or is there another huge factor(s) I am missing?
In: 54
Credit ratings are not really about how much debt you have, but how good and reliable you are at servicing the debts you have.
In other words, do you make all the payments you need to make in time.
Creditors want to know that if they lend you money, you’ll make the interest payments. They don’t really want the whole debt paid off, there’s little profit in that. What they want is you paying interest every month for as long as possible.
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