  We explicitly test if the reliability of credit ratings depends on the total
number of admissible states. We analyse open access credit rating data and show
that the effect of the number of states in the dynamical properties of ratings
change with time, thus giving supportive evidence that the ideal number of
admissible states changes with time. We use matrix estimation methods that
explicitly assume the hypothesis needed for the process to be a valid rating
process. By comparing with the likelihood maximization method of matrix
estimation, we quantify the "likelihood-loss" of assuming that the process is a
well grounded rating process.
