Scranton announced Tuesday it got another bump up in its credit rating, from BBB+ to an A-, which is the highest grade for the city in recent decades at least and the latest positive financial step in a total turnaround from near bankruptcy in 2012.

The credit-rating firm Standard & Poor’s increased the city’s credit rating from BBB+ with a positive outlook to A- with a stable outlook.

Credit ratings on municipal borrowing through bonds impact the amount of interest paid on the debt. A higher credit rating reflects financial stability and translates into lower interest rates. A lower credit rating — or worse, no rating at all — reflects distress or uncertainty and translates into higher interest rates. Or, in other words, the higher the credit rating, the less debt will cost the city it can command lower interest rates on borrowing.

The improved credit rating reflects a financially healthy city government that can afford to pay its bills, rely less on debt, and has sound financial policies in place to ensure taxpayer dollars are being used responsibly and efficiently, Mayor Paige Gebhardt Cognetti said in the announcement.

“We are beginning the new year with very positive news for the City of Scranton,” Cognetti said. “Our credit rating increase to A-, with a stable outlook, affirms that the taxpayer dollars we receive from our hard-working residents are being used effectively and appropriately to generate real results for our City. We will continue building a government that works for everyone and remain committed to excellence in our operations, management practices, and financial policies.”

The city’s credit rating breaking into the grade A category of ratings levels is the latest step in the city’s long road to improved financial health. The city lost its credit rating in 2011 and did not have it reinstated until 2016, but even then it was still characterized as “junk bond” status.

Some recent improvement steps included:

• In 2022, the city finally successfully exited state Act 47 oversight after 30 years of being designated as financially distressed.

• In 2023 — and for the first time since 2011 — Standard & Poor’s upgraded the city’s bond rating to an investment-grade level of BBB-.

• In 2024, the city achieved an uncommon two-notch jump in its credit rating to BBB+, and with a positive outlook.

• In 2025, the city received the Secretary’s Award for Municipal Excellence from Pennsylvania’s Department of Community and Economic Development.

The new Standard & Poor’s report cites as reasons for the upgrade: the city’s economic activity, improved tax collections, budget performance and continued efforts over the past five years to tackle the city’s debt burden and high unfunded retirement liabilities; and the recent Lackawanna County reassessment also is playing a role in improving the city’s overall financial health.

“The rating reflects our view of the city’s stabilizing financial performance, restoration of reserves to healthier levels, and strengthening tax base, which has benefited from the most recent reassessment,” the S&P report said.

Scott Shearer of PFM, the city’s financial advisor for the past 12 years, said the bond upgrade represents a milestone in the city’s improved financial condition.

“In my 28-year public finance career, I have not seen such a remarkable turnaround for a client. A lot of hard work, hard decisions, and strong leadership have put the city in its strongest financial position,” Shearer said in a statement provided in the city announcement.