Definition of credit outlook

A credit or rating outlook indicates the potential direction of a rating over the intermediate term, typically six months to two years. When determining a rating outlook, consideration is given to any changes in the economic and/or fundamental business conditions.

An outlook is not necessarily a precursor of a rating change, and is often used to maintain the stability of long-term ratings.

The outlook provides information to investors on the potential evolution of a rating, hence it increases the precision of the rating.

For rating agencies such as Moody’s, Fitch and Standard & Poor's, a positive outlook means that a rating may be raised. A negative means that a rating may be lowered, stable means that a rating is not likely to change and developing (or evolving) means that a rating may be raised or lowered. [1]