This study employs a competing risks approach to examine the rating migrations of US financial institutions (FIs) during the period 1984–2006. It finds that downgrades to alternative major rating categories require separate models, while upgrades can be treated as equivalent in the same analysis. Different downgrade routes exhibit different within-rating heterogeneity and time heterogeneity. The effect of rating history persists, and for downgrades to speculative ratings it becomes stronger as controls for outlooks/CreditWatch are added. The rating history, macroeconomic and political cycles jointly exhibit discrimination accuracy in predicting the outcomes of rating changes during the holdout-crisis period (2007–10). In most cases, adding the current rating, outlook or CreditWatch does not substantially improve the forecast performance of the models out-of-sample.