Rating scales

Rating scales describe an issuer's or instrument's relative creditworthiness. While the Big 3 use broadly comparable scales, the exact notation differs. Investment grade — typically BBB– / Baa3 and above — attracts the broadest investor base; speculative grade — below BBB– / Baa3 — carries higher yields and more covenant scrutiny.

Long-term issuer ratings

Grade	S&P / Fitch	Moody's	Description
Investment grade	AAA	Aaa	Highest credit quality — exceptional financial strength
	AA+ / AA / AA–	Aa1 / Aa2 / Aa3	Very high credit quality
	A+ / A / A–	A1 / A2 / A3	High credit quality — above-average ability to meet obligations
	BBB+ / BBB / BBB–	Baa1 / Baa2 / Baa3	Good credit quality — adequate capacity, some vulnerability to adverse conditions
Speculative grade	BB+ / BB / BB–	Ba1 / Ba2 / Ba3	Speculative — faces material ongoing uncertainties
	B+ / B / B–	B1 / B2 / B3	Highly speculative — currently able to meet obligations but vulnerable
	CCC+ / CCC / CCC–	Caa1 / Caa2 / Caa3	Substantial credit risk — dependent on favourable conditions
	CC	Ca	Very high credit risk — default appears probable
	C	C	Extremely high credit risk / near default
Default	D / SD	—	In default or selective default

Modifiers

S&P and Fitch apply “+” and “–” modifiers from AA to CCC, giving three notches within each letter category (e.g. AA+, AA, AA–). Moody's uses numeric modifiers — 1, 2, and 3 — for the same purpose, with 1 indicating the strongest position within a category (e.g. Aa1, Aa2, Aa3).

Outlook and CreditWatch

Agencies attach a forward-looking outlook to most ratings — positive, stable, negative, or developing — signalling the likely direction of the rating over the medium term, typically a 12-to-24-month horizon. Shorter-horizon, more event-driven actions are flagged separately: S&P uses CreditWatch, Moody's uses Watchlist (Under Review), and Fitch uses Rating Watch. These on-watch designations typically resolve within 90 days.

Other agencies' scales

Scope Ratings, DBRS Morningstar, and KBRA each use a scale broadly aligned with S&P and Fitch notation — AAA to D, with + and – modifiers — making cross-agency comparison straightforward for long-term ratings. Short-term scales and outlook terminology vary slightly by agency.

Agency	Scale format	Modifiers	Short-term scale
Scope Ratings	AAA to D	+ / –	S-1+ / S-1 / S-2 / S-3 / S-4
DBRS Morningstar	AAA to D	High / Low	R-1 (H/M/L) through R-5, D
KBRA	AAA to D	+ / –	K1+ / K1 / K2 / K3 / B / C