How can you determine bond quality?

Determine a bond's quality. Bonds are given a rating or grade that indicates their credit quality. This measures a bond issuer's ability to repay the invested capital and interest on time.

The agencies that rate bonds are private, independent companies such as Standard & Poor's, Moody's, and Fitch. Ratings may be found by searching for the bond online.

•    Bonds are generally rated from "AAA" to "C", with a rating closer to AAA indicating higher reliability. Though different rating agencies use different combinations of uppercase and lowercase letters to represent these ratings, they use the same combinations of letters (for example, "AAA" is the same as "aaa").
•    As a general guide, anything over "BBB" is considered to be investment grade. That is, the ratings agencies consider it to be safe enough to invest in.
•    An additional rating, "D", is sometimes used for bonds in default