Ratings agencies emphasise that both financial and non-financial factors are important in the allocation of corporate credit ratings to firms. This study extends the academic literature on the influence of non-financial factors and studies the effect of the industry characteristics of competition, regulation, industry assistance, technological risk, growth, international exposure, capital intensity and unionisation on the credit ratings of Australian firms. Evidence is found that, after controlling for the explanatory power of financial variables, these characteristics jointly explain approximately 15% of the ratings allocation decision. Moreover, when the information value of these industry characteristics is utilized in a ratings classification model that also uses financial information, that model experiences greater ability in predicting the ratings of firms in the highest and lowest ratings categories than if it relied solely on financial information. These results suggest that industry characteristics act as signal whether the current performance of the firm is expected to persist, improve or deteriorate in the future and that this signal is particularly important in determining whether a firm has a rating that is AA and above, or BB and below. This finding has practical implications for the credit ratings management strategy of firms and investors.