Since the downgrade of the U.S. Government’s credit rating by rating agency Standard and Poors (S&P) I have often wondered how an individual would be rated using a similar rating methodology.   So, I created a simple credit rating calculator allowing users to quickly and easily compare themselves to the U.S. Government using financial metrics like the ones utilized by the debt rating agency.   Here are the key metrics we used:

1. Interest Coverage Ratio, calculated as: Annual Income / Interest Expense.  The U.S. Government Interest Coverage Ratio is approximately 18.2 times (18.2x).  A ratio over 18.2 would be considered better than the U.S. Government.
2. Gross Leverage Ratio, calculated as; Total Debt / Annual Income.   The U.S. Government has a Gross Leverage Ratio of about 100%.  A ratio less than 100% would be considered better than that of the U.S. Government.
3. Net Leverage Ratio, calculated as; (Total Debt – Financial Assets) / Annual Income.   The U.S. Government has a Net Leverage Ratio of approximately 74%.  A ratio less than 74% would be considered better than that of the U.S. Government.

For the purposes of this exercise we indexed the U.S. rating to a total score of 100% for comparative purposes.  If your overall rating is greater than 100% than your rating is higher than the U.S. according to our “basic” and completely unofficial credit rating model.

Go to the

Credit Rating Calculator

Related External Links

• Americans downgrade Congress to historic low 13% job approval …
• The Standard | Online Edition :: What US government downgrading …
• Economix Blog: The Credit Rating War
• US Credit Rating Downgrade | Stringfellow Investment Specialists
• Nancy Folbre: The Credit Rating War – NYTimes.com
• State credit rating | BadgerStat
• Powerful credit-rating agencies are a creation of the government …
• Standard & Poor’s, others lobby government while rating its credit
• Political gridlock prompts S&P’s government credit rating …
• Watching America : » Downgrading United States’ Credit Rating Is …

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