Since the middle of the twentieth century, the United States of America has maintained a perfect credit rating. However, very recently, this triple A status has been revoked so that now, the USA sits with a score that is one notch removed from the top of the ratings ladder.

The implications of this alteration are bound to be far reaching, and will affect everything from the Gold price today to the value of the US currency. If you are keen to determine the extent to which your own finances may be affected, it is important, first, that you understand what it means for credit ratings to deteriorate.

A credit rating, not to be confused with a credit score, evaluates the capacity of a debtor to repay their loans. The assessment is undertaken by experts in the field who use their judgment and experience, along with an extremely sophisticated understanding of the economy, to determine whether a company or a government is likely to default on payments.

What sets the credit rating apart from the credit score is this human element. A credit score is worked out using mathematical algorithms, while a rating is the result, as established, of a more general evaluation. The dip in the USA's credit ratings thus means that assessors are no longer confident that the country can repay its loans.

While it may appear that this event is fairly far removed from your own personal financial situation, it is important to remember that the US economy is the largest in the world, and that it has ties to myriad other countries. In this sense, the ups and downs of the USA's bank balance are bound to affect your own at some point.