Firms get multiple ratings to protect themselves from being downgraded. A study looked at U.S. companies after a rule change in 2005 and found that they started getting a third rating to avoid downgrades. This was especially true for companies at risk of being downgraded. Mutual funds also started investing more in bonds with three ratings. Overall, investors traded these bonds more actively. This shows that having multiple ratings helps firms and investors avoid the negative effects of a downgrade.