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Moody's Credit Rating

Bank Security

Moody's credit rating has become one of the most respected financial rankings. Moody's Investors Service does extensive research and financial analysis on both commercial and government entities in an effort to rank them for stability and creditworthiness. The company ranks this creditworthiness by using standardized rating scales. Moody's is large, with a 40 percent share in the world credit rating marketing.

Moody's Credit Rating Methods

Moody's ratings can be broken down into several types: long-term obligation ratings, short-term taxable ratings, short term tax exempt ratings and individual bank ratings.

Long Term Obligation Ratings

Moody's long term obligation ratings specifically look at the credit risk of fixed income obligations. These obligations have a maturity that is a year or more. Specifically, the ratings look at the possibility that the financial obligation won't be paid, or the risk of default. This helps investors know how likely financial loss will be.

Ratings include:

  • Aaa: The highest quality and have only the smallest degree of risk
  • Aa1, Aa2, Aa3: High quality with a slightly higher level of risk, however they are susceptible to long-term risks
  • A1, A2, A3: A rated are upper medium-grade risks, however they have susceptibility to risk over a longer period of time
  • Baa1, Baa2, Baa3: Moderate level of credit risk

The list continues through "C", with each downgrade continuing to be a larger level of risk taken on by the investor. There are also several "special" ratings used including:

  • WR: Withdrawn Rating
  • NR: Not Rated
  • P: Provisional

Short Term Taxable Ratings

Moody's also rates short term taxable investments according to the level of risk they present. These ratings look at how likely the issuers of these short term financial obligations are to default. These obligations have a maturity that is no more than 13 months. Ratings include:

  • P-1: Have the highest strength and therefore have the highest ability to repay
  • P-2: Have a strong ability to meet repayment on debt obligations
  • P-3: Has what Moody's calls an acceptable level of ability to repay short term obligations
  • NP: This Not Prime rating means that the issuer does not have the ability to fit within any other category.

Short Term Tax Exempt Ratings

Investors of this type of investment will want to know the level of risk they are taking on. The ratings are specific to municipal bonds, but are rated much differently than the Standard & Poors (S&P) rating system. The same implications as the Short Term Taxable Ratings are used to rate these debt obligations.

Individual Bank Ratings

Moody's also works to rate individual banks by their strength. The ratings specifically look at how likely the financial institution is to need help from a third party:

  • A: The highest level, showing intrinsic financial strength from the company. These are least likely to have difficulties.
  • B: Shows good financial strength
  • C: Adequate financial strength
  • D: Modest financial strength with the potential of requiring outside support at some time
  • E: Very modest strength, with a higher likelihood of need support at periodic intervals

It is important to point out that while Moody's ratings are highly usable and realistic, the rating is not a promise of the financial strength of any commercial or governmental entity. Moody's is unable to predict the future.


By visiting, individuals can learn about the company's ratings. This includes information on:

Money Lending Risk
  • Corporate financial ratings
  • Financial institution ratings
  • Structured finance
  • Sovereign
  • International public finance
  • United States public finance

Moody's credit ratings are displayed through membership with the company. The company provides information on credit trends, financial metrics, credit values, as well as the subprime market and credit markets as a whole.

The company is used by various organizations, investors and the private sector to better understand the financial stability of any commercial or governmental entity.

To learn more, visit

Moody's Credit Rating