What does the MOODY classification to classify American credit for retirees mean

Nobody likes to see a decrease in their credit rating, because it indicates a number of issues (the poor BudgetExcess spending, borrowing more than he can pay) and increases the individual’s financial consequences (it is difficult to agree to things such as apartment rents, Real estate loansCredit cards, loans and interest rates for each of them rise). It is bad enough when one person’s credit is photographed; An entire nation is completely something else – it affects everyone in the country, from young people to retirees.

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This is exactly what happened on May 16, when MOODY classifications were reduced in Moody Global Credit Services and Financial Services Credit Classification for America. Discover what this means for retirees below.

MOODY classifications work on a rating scale of 21 of 21, and America was at the highest level (AAA), but is now reduced to AA1, for each CNBC.

In a statement, the evaluation service indicated its reduction in America’s credit as reflecting “the increase that exceeds a decade in government debt rates and pay benefits to much higher levels of kings classified as well.” This is in line with each other major credit classification agency, each of which has currently put America in the second highest classification, instead of the top.

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As a result of the decline in the credit classification in America in this way, it is possible that the cost of borrowing increases, as the creditors want to protect themselves now above. Useful interest rates. This probably means high interest rates for credit cards, mortgages, personal loans and more.

Such interest rates can be particularly imposed on retirees. For all sincerity, credit rating can lead to deviation Bond prices Retired retired people with a financial share will want to monitor their operations for potential changes. Low bond values ​​can also increase increases in Economic inflation. Moreover, mixed investment portfolios may become unstable as a result, which may be for retirees on the fixed income who live outside their investments.

In addition, the increase in interest rates may lead to high borrowing costs for all consumers, including retirees on fixed income who may not be able to afford such an increase (for example, that mortgage rates increase largely to prevent retirees from buying or re -transfer, a retirement house).