What is a long-term rating?
Credit rating agencies issue long-term ratings for gilts and bonds to denote the likelihood that a company or government will default on loans that last for longer than a year.
Where have you heard about long-term ratings?
Top credit rating agencies Standard & Poor’s, Moody’s and Fitch are famous for issuing long-term ratings. You’ll hear about it if a country’s rating is downgraded. The UK's credit rating dropped following the Brexit vote.
What you need to know about long-term ratings.
Long-term credit ratings are denoted with a letter grading system. Each agency does it slightly differently, but AAA or similar is the top rating of credit worthiness, while anything below a B is considered high risk.
If you decide to invest in government or corporate bonds, it’s important to know the risks involved. A long-term credit rating doesn’t give you any guarantees that an investment is safe, but it may act as a good guide for bonds with maturity dates of longer than 12 months.
Find out more about long-term ratings.
Read our definitions of credit rating and credit rating agency to learn more about the ratings system.
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