What does downrating mean?
Downrating refers to the act of assigning a lower rating, score, or classification to something that was previously rated higher. It is most familiar from the world of finance, where credit rating agencies such as Moody's, S&P, and Fitch may issue a downrating of a government's or corporation's debt when they judge its ability to repay has weakened. Such a move typically raises borrowing costs and can rattle markets. Beyond finance, downrating appears wherever formal systems of evaluation exist: sports seedings, product reviews, insurance classifications, and academic assessments. The word is formed from the verb 'downrate', combining the adverbial prefix 'down-' with 'rate', itself derived from the Old French 'rate' meaning a computed proportion. Though grammatically standard, downrating is somewhat formal and technical in register; in casual conversation people are more likely to say 'downgrade'. Its connotations are generally negative, implying decline, reduced trust, or diminished standing.
A reduction in the rating, score, or classification assigned to a person, organization, security, or asset.
"Investors braced for a possible downrating of the country's sovereign debt."
Most frequent in financial journalism and analysis, particularly regarding credit ratings.
Present participle of 'downrate': to assign a lower rating or classification to.
"The agency is downrating the bonds after reviewing the firm's latest earnings report."
Often used in progressive constructions ('is downrating') or as a gerund ('the downrating of').
Used when referring to multiple instances of rating reductions, often across different entities or time periods.
"The year saw a wave of downratings across the banking sector."
When a credit agency issues a downrating, billions of dollars in borrowing costs can shift overnight — all from a single letter change on a bond label.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does downrating come from?
Downrating derives from the verb 'downrate', formed by combining the directional prefix 'down-' with the verb 'rate', which entered English in the late Middle Ages from the Old French 'rater' or 'rate', ultimately from medieval Latin 'rata' (as in 'pro rata'), meaning a fixed proportional amount. The compound 'downrate' arose in modern English, gaining particular currency in twentieth-century financial terminology alongside the growth of formal credit rating agencies. Cognates of the root include 'ratio', 'ration', and 'reckon', all tracing back to the same Latin root concerning calculation and proportion.
Related word forms
How downrating is actually used
'Downrating' is most commonly encountered in financial and technical contexts — especially credit ratings — where it functions as the noun form of 'downrate'. It carries a neutral-to-negative connotation, since it typically signals deterioration in quality, creditworthiness, or standing. In everyday informal speech, speakers more often use 'downgrade' rather than 'downrate'.
Easily confused with downrating
Both mean lowering a rating or status, but 'downrating' specifically refers to reducing a numerical score or official classification (e.g. credit ratings), while 'downgrading' is broader and can refer to any reduction in rank, quality, or category.