Prior research suggests that good corporate governance helps firms reduce agency costs arising from the conflict of interests between management and ownership. Also, credit rating agencies assert that corporate governance is an important factor for assessing the credit quality of the firm. These suggest that corporate governance is likely to affect credit ratings of firms. Since the inception of credit rating practices, many studies have examined determinants of credit ratings of firms and documented that both financial and non-financial factors are relevant to the credit ratings of firms. However, there are nearly none that examine the role of corporate governance in assessing credit ratings of firms. Thus, this study examines whether corporate governance affects credit ratings of unsecured bonds issued by firms. Following prior research, we examine several attributes of corporate governance. Specifically, we investigate the ownership interest held by owner-managers, monitoring of the board of directors and audit committee, monitoring of foreign investors, and affiliation with large business groups. We find that for firms listed on the Korea Stock Exchange(KSE) the ownership interest held by owner-managers has a positive effect on the credit ratings of bonds. This positive association becomes stronger for the ownership greater than 40% of total shares, suggesting that the effect has an ‘U’ shape on the credit rating. The results reveal that the equity ownership held by foreign investors is positively associated with the credit ratings of bonds. This indicates that foreign investors positively affect the credit quality of firms by enhancing the transparency of firms. We also find that firms affiliated with large business groups tend to receive higher credit ratings for their bonds. An affiliate with a business group can be propped up by other firms affiliated with the same business group when it is financially troubled. Thus, it appears that the affiliation with business groups enhances credit quality of firms. Contrary to the expectations, neither the board independence nor the existence of the audit committee is significantly related to the credit ratings of bonds. On the other hand, for firms registered in the Korea Securities Dealers Automated Quotation(KOSDAQ) market corporate governance attributes have little effects on the credit ratings of bonds. Rather, financial stability indicators such as size, liquidity, and capital structure are important for the credit ratings of the KOSDAQ firms. In sum, the results show that corporate governance has positive effects on the credit ratings of firms.