What Happens When a Company Disagrees With Its Rating?

A company that disagrees with its rating has several legitimate, constructive avenues available — but no path that allows it to simply overrule the agency's independent judgement, making a clear understanding of what is and is not possible essential to responding productively.

First: Distinguish the Specific Source of Disagreement

The most useful first step for a company disagreeing with its rating is to precisely identify the specific source of the disagreement — is it a factual matter (a figure the agency appears to have misunderstood or used outdated data for), a methodological matter (a belief that a particular factor is being weighted inappropriately relative to how the company views its own risk), or simply a difference in overall judgement about how the various factors should combine into a final rating. Each of these calls for a somewhat different response.

If the Disagreement Is Factual

Where the company believes the agency has worked from an inaccurate or outdated figure, the appropriate and generally effective response is to raise this directly and specifically with the agency, ideally before the rating is finalised for publication, with clear supporting documentation. Agencies are generally responsive to well-documented factual corrections, since accuracy is central to their own credibility, and this is one of the more straightforward and commonly successful forms of engagement.

If the Disagreement Is Methodological or Judgemental

Where the disagreement is less about a specific fact and more about how the agency has weighted or interpreted a particular factor, the company can raise this as a considered, well-articulated point during the review process — sharing its own perspective, with supporting evidence, on why a particular factor should perhaps be viewed differently. The agency is not obligated to change its view based on this input, but a well-reasoned, evidence-backed submission is more likely to be genuinely considered than a general assertion of disagreement without specific substantiation.

It is worth being realistic here: a company's own view of its risk profile is inherently less independent than the agency's, and agencies generally give appropriately more weight to their own analytical framework than to a company's self-assessment, however sincerely held — this is, after all, precisely the independence the rating is meant to provide to the market.

The Longer-Term, More Reliable Path: Demonstrated Improvement

For most companies genuinely disagreeing with a rating — believing their credit profile deserves better recognition than it has received — the most reliable path forward is the one covered extensively in the rating improvement pillar of this content series: engaging substantively and specifically with the sensitivities the rationale identified, and demonstrating measurable, sustained progress against them over subsequent review cycles. This approach, unlike attempting to directly contest the original judgement, has a genuine track record of producing rating movement over time when the underlying improvement is real and sustained.

What Not to Do

•      Avoid escalating disagreement into pressure tactics — withholding future cooperation, threatening to switch agencies specifically in response to the disagreement — which are generally counterproductive and can themselves become a governance concern noted in future reviews

•      Avoid presenting only the company's own selectively favourable interpretation of its financials to lenders or investors while omitting the agency's less favourable published view, since this is likely to be discovered and can damage credibility considerably more than the original disagreement itself

•      Avoid assuming that simply disagreeing loudly or repeatedly will change the outcome without new, substantive information or genuine underlying improvement to support a different conclusion

Talk to FinMen Advisors — for help preparing for a rating exercise, write to marketing@finmen.in or call +91 77387 14680.

Disclaimer: This article is intended for general informational and educational purposes only and does not constitute financial, credit, investment, or legal advice. Credit ratings are assigned solely by SEBI-registered Credit Rating Agencies (such as CRISIL, ICRA, CARE Ratings, India Ratings, Brickwork, Acuite, and Infomerics) based on their own methodologies, policies, and the information available to them at the time of assessment. FinMen Advisors provides preparatory and advisory support to companies undergoing a rating exercise and does not issue, influence, or guarantee any rating outcome. Readers should exercise independent judgement and consult qualified professionals before making business or financial decisions.