Can a company have a credit rating better than that of the country where it is located?
"BlackJack's answer is technically correct: government credit ratings are independent of corporate credit ratings.  The rating should reflect the borrower's ability to repay its obligations. One reason the book you read may have stated that corporate credit ratings cannot be better than the government's credit rating is that the government, unlike the corporation, can steal (or in government parlance ""tax"") from anywhere or anyone.  So if a government finds itself in financial difficulty it could simply take the cash from corporations or people with high credit ratings by a variety of methods: implement windfall profit taxes, take over industries, take peoples gold, tax pension savings, or simply take peoples pensions or retirement savings.  This increases the risk of doing business in a country with an over-extended government. Over extended governments do not die gracefully.  They only die when there is nothing left to steal." "In one personal finance book I read that if a company is located in a country with credit rating X it can't have credit rating better (lower - i.e. further from AAA level) than X. This is simply wrong. Real world evidence proves it wrong. Automatic Data Processing (ADP), Exxon Mobile (XOM), Johnson & Johnson (JNJ), and Microsoft (MSFT) all have a triple-A rating today, even though the United States doesn't. Toyota (TM) remained triple-A for many years even after Japanese debt was downgraded. The explanation was the following: country has rating X because risk of doing business with it is X and so risk of doing business with any company located in that country automatically can't be better than X. When reading financial literature, you should always be critical. Let's evaluate this statement. First off, a credit rating is not the ""risk of doing business."" That is way too generic. Specifically, a credit rating attempts to define an individual or company's ability to repay it's obligations. Buying treasuries constitutes as doing business with the gov't, but you can argue that buying stamps at USPS is also doing business with the gov't, and a credit rating won't affect the latter too much.  So a credit rating reflects the ability of an entity to repay it's obligations. What does the ability of a government to repay have to do with the ability of companies in that country to repay? Not much. Certainly, if a company keeps it's surplus cash all in treasuries, then downgrading the government will affect the company, but in general, the credit rating of a company determines the company's ability to pay."
"There are two things I can think of that might be different in other countries: Until 2013, American Express, Visa and MasterCard prevented businesses from charging extra for credit card usage, and credit card surcharges still illegal in several states. Since credit card companies add a surcharge to credit card purchases, and merchants can't pass that onto credit card users, they just make everyone pay extra instead. Since everyone gets charged the credit card surcharge, you might as well use a credit card and recoup some of that via ""rewards"" points. Almost all credit cards here have grace periods, where you won't be charged interest if you pay back your loans in full within some period of time (at least 21 days). This makes credit cards attractive to people who don't need a loan, but like the convenience that credit cards provide (not carrying cash, extra insurance, better fraud protection). Apparently grace periods aren't required by law here, so this might be common in other countries as well." "&gt;We also have the highest expenditures as a percent of GDP than any other nation. Needless to say we spend a LOT on health care also.  That is in large part do to insane healthcare costs passed on to the consumers by the aca. Healthcare spending has increased on average 1.5% annually since 2009 where as the highest growth in spending from 1991 until 2006 was 1.3% (im willing to admit my research may be incomplete or inaccurate here as the available rescources are pretty limited in my short time researching)   &gt;we do have arguably the best health care services in the world... that is mostly only true if you are very wealthy.  Thats a dumb statement leftists make. There is no excuse to not put yourself in debt for the best healthcare possible. Idk about you but I'd rather be in a lot of debt getting first rate healthcare than get affordable care from a 2nd rate community college doctor. Did you also know that medical debt doesnt effect your credit score so even if you ""default"" on medical debts it doesnt effect any part of your life. so why wouldnt you go in debt and then slowly pay off that debt with no fear of negative repercussions for not paying?  &gt;When you break it down on results per dollar spent, the US doesn't even break the top 20. When you break it down on infant mortality, and life expectancy, we have been on a backward slide for a while now (although those rates improved for the short while that the ACA has been in effect, as have the net increase in costs). At the end of the day, the cost of health care has grown 3X faster than inflation, and 20X faster than the average income for over 30 years now. So, no, health care in this country is not the best to the average person.  I dont have health insurance and an ER visit with xrays costs me less out of pocket than 90% of the country why is that? Do you think it has to do with the fact that with the aca hospitals know they are getting paid with 0 questioning on pricing so charge whatever they want and with me they think ""shit this guy might not ever pay us lets just give him a decent price and get some money from him because all we can do is send his bill to collections"" you clearly dont know how the system works especially because you think its my responsibility to provide you with health insurance. You keep saying i need to travel and experience the world when all you need to do is go to google and look at what a wonderful job Switzerland does with their healthcare. The swiss do everything better, They have some of the best services in the world and a very affordable healthcare plan with many options that is affordable to the tax payers unlike the ACA. You have a very clear Scandinavian bias as im assuming you're a bernie supporter who loves democratic socialism despite all of its short comings.  &gt;And yes, Space X has been able to estimate a savings of $300M less... Commercial does a great job of expanding on the research and knowledge that has come from government sponsored R&amp;D. You see that in every modern technological advancement - from the internet, cellular phones, GPS, medical procedures, etc. There are so many modern inventions that have sprung from government patents and government research programs.  This is the dumbest statement youve made this entire time. The notion that inventions that were made on the governments dime (my dime) is somehow the product of the government is asinine at best. Youre operating under the assumption that these inventions wouldnt have been made without government funding which is false. They all would have been made on a smaller budget granted maybe a little bit further down the road but not by much considering technology has expanded (with no help from any government) more in the last 20 years than in the prior 200 because thats what technology does it makes life easier for everyone and almost innovates itself. Take apple for instance where is all the government funding they recieved to be one of the most innovative companies in human history or microsoft? Yiou can max 10 things government funding invented when i can walk into your house and point out 10000 things the government had no hand in at all." I hope there's so much wrong with what I wrote, I do. Thank you for correcting me. For argument's sake, my following responses will assume that you are talking about the US market. Almost any other kind of argument would take too long to elaborate or expand upon.   In North America, the rules of Capitalism *are* somewhat ironclad, are they not? Did Americans have a debate over whether or not workers even have the right to strike, or collectively bargain, last year? Aside from that, I am aware hat other US companies do in fact offer much better benefits than others. Target, for example, offers much better healthcare insurance than Walmart does. This is among one of many boons that Target offers to its employees. It can be argued that Target treats its employees much better than Walmart, including its part-time employees. Why, therefore, is Target not much more popular than Walmart? My answer would be that the average consumer does not care about much except lower prices, and those consumers that do, do not shop at Walmart, which is still the most popular supermarket chain in the US. The consumers who do shop at a different or more expensive chain are therefore in the minority, whether because of morals or lack of choice. Corporations are amoral. They exist solely to make a profit, and nothing else. Compassion does not come into it. Higher standards are, and will expand, if there is consumer interest in them doing so.   Outsourcing definitely applies here. You've seen the self-checkout facilities available at most stores? When there is a way of scanning every product a person has on them before they exit the store as well as a way of preventing them from exiting the store before they've paid for those goods, you can bet anything on almost every cashier in America being fired from the stores that can afford it. We are very, very close to that, in terms of technology alone, let alone deployment.   The US cannot afford to impose tariffs, unfortunately. With every anti-competitive tariff it imposes, exports and imports go down in the billions of dollar ranges. It is not a coincidence that the Eurozone countries who have led the way in tariffs are those you names in your post. In the age of globalisation, everyone can simply go...somewhere else for their needs. The same unfortunately goes for taxes, import premiums, or anything else that you care to name. I agree with you that fighting for labour rights across the world is the only effective answer to that.  But that will of course never happen. When labour rights issues erupt in the country that the majority of the world's manufacturing happens, most corporations will simply stick with it until their position becomes untenable, and then they will move to a different country, where labour laws are not as as strong. China is this generation's manufacturing bitch, who will be next? Because companies are worrying about this already.They are looking at shithole places in India, and places in Brazil, and places in Ghana, or Indonesia, or anywhere else that can be persuaded to educate a proportion of its workforce to the minimum necessary levels. It's sad but, remember that if any thought is applied to this, the people who make the things that Chinese/Indian/Ghanan/Indonesian make for pennies on the dollar is that those people's wages will eventually rise enough that there can be a middle-class, at which point the companies involved simply move on to a country that does not have a middle-class or a higher-working class. Forever. That's...the multinational plan. Capitalism, remember, is a system based on unlimited expansion. It just is. No arguing round that one.    And finally, 'fiscally sensible' means, to me, that a country retreats from the goddamn cliff it's on when it sees that if it carries on this way, it's truly, amazingly fucked. The debt ceiling fiasco earlier nearly plunged the world economy into recession, in spite of the fact that it should have been a done deal, something nobody anywhere got their tits up about. But no. Politicians literally ransomed it for things that they wanted that were kinda contrary to the interests of the US economy at large, and therefore the fucking WORLD economy at large. If the US had defaulted, it would have fairly literally fucked to rest of us. And I mean the other 670,000,000,000 people alive right now. All coz your Republicans didn't like a black guy. What? Barack Obama does things by pretty classical Keynesian economics. By following those tenets, the whole goddamn world enjoyed a period of uninterrupted growth and prosperity from 1948 to about 1970, depending on where you are. Talk to me all you like about Europe's destroyed industry from WW2 but the simple fact is that the maxim of 'save during booms' and 'spend during busts' created more jobs and helped more economies that you can name. Thanks to political expediency, however, and apparently Reagan, the US at large seems to believe that anything even approaching left-wing politics (and for the purposes of this argument that includes healthcare and, y'know, not caring what or who a woman puts up their vagina) is anathema. It simply isn't accepted, and decried as 'socialism' by any opponents. These arguments and these debates literally don't make any fucking sense to the rest of us. Not even a little bit. Abortion, gay marriage, legalizing marijuana, *NOT* invading other countries. These issues are settled for the vast, vast majority of us. It's fucking insane to us that they aren't for you.   In fairness it is, however, because of your politics that you can't do any of these things. You are a nation of three hundred and fifteen million. It can't be expected of you that you have a consensus on these issues. But what gets us is that you never fucking try. We have the European Parliament, imperfect though it may be. It still gives us a voice in issues as basic as gay marriage or abortion. We aren't in permanent deadlock over things as unimportant as this.   I don't mean to paint Europe or anywhere else as some kind of paradise. Just that companies in Europe seem to just not care; companies in the US seem to be out to try and actively fuck you.     Quick edit: holy shit that was a long reply, don't bother reading it.   TL;DR: Companies don't give a shit if they fuck you or not unless market conditions In Finland, this happens all the time - it's all about having an official ID, they don't even ask your bank account number or the card. However, as no location was specified in the question, I guess it could be anything. The stronger the requirement for official personal id is in your country, the better odds you have with just using that. Where I live it is quite strong. "To answer the heart of your question, it would be illegal for any credit bureau or creditor to somehow ""penalize"" you just for trying to make sure that what's being reported about you is accurate.  That's why the Fair Credit Reporting Act exists -- that's where the rights (and mechanisms) come from for letting you learn about and request accurate reporting of your credit history. Every creditor is responsible for reporting its own data to the bureaus, using the format provided by those bureaus for doing so. A creditor may not provide all of the information that can be reported, and it may not report information in as timely a manner as it could or should (e.g., payments made may not show up for weeks or even months after they were made, etc.). The bottom line is that the credit bureaus are not arbiters of the data they report.  They simply report.  They don't draw conclusions, they don't make decisions on what data to report.  If a creditor provides data that is within the parameters of what the bureaus ask to be provided, then the bureaus report precisely that -- nothing more, nothing less. If there is an inaccuracy or mistake on your report, it is the fault (and responsibility) of the creditor, and it is therefore up to the creditor to correct it once it has been brought to their attention.  Federal laws spell out the process that the bureau has to comply with when you file a dispute, and there are strict standards requiring the creditor to promptly verify valid information or remove anything which is not correct. The credit bureaus are simply automated clearinghouses for the information provided by the creditors who choose to subscribe to each bureau's system.  A creditor can choose which (or none) of the bureaus they wish to report to, which is why some accounts show on one bureau's report on you but not another's. What I caution is, just because a credit bureaus reports on your credit doesn't mean they have anything to do with the accuracy or detail of what is being reported.  That's up to the creditors." There is no country tag, so I will answer the question generally. Is it possible...? Yes, it's possible and common. Is it wise? Ask Barings Bank whether it's a good idea to allow speculative investing. It can be done, but I believe it would be impractical for most people - i.e., it would likely be cheaper to fly to Europe from other side of the world to handle it in person if you can.  It also depends on where you live. You should take a look if there are any branches or subsidiaries of foreign banks in your country - the large multinational banks most likely can open you an account in their sister-bank in another country for, say, a couple hundred euro in fees. The informational goal about the ratings is an objective opinion about the companies ability to repay the money owed.  Debt rating agencies even provide tables where grades correspond to a range of default probabilities.  The argument I am making is they do not go about their business of giving accurate probabilities of default.