Credit Rating Agencies (CRAs) play a pivotal role in today’s financial system by assessing the creditworthiness of companies, governments, and financial instruments. Their ratings help investors, lenders, and policymakers evaluate the level of risk associated with a particular entity or investment. This paper explores the influence of credit ratings on financial decision-making, particularly in investment selection, lending, borrowing costs, and regulatory compliance. The study also examines the reliability of these ratings and the challenges CRAs face, including potential conflicts of interest and their impact during financial crises.