The paper examines the relation between the financial statement readability and credit rating conservatism. The Fog Index of the financial statements of the United States publicly listed companies and the text length of their financial statements are employed as the readability indicators. I find that: (1) firms with annual reports that are harder to read (i.e., they have a higher Fog index and longer length) have more conservatism; (2) rating agencies have become more conservative in assigning credit ratings during dot.com bubble and financial crisis; (3) rating agencies have faced increased regulatory pressure result in becoming more conservative after Sarbanes‐Oxley Act; and (4) as firms have lower readability, it will influence the rating agencies becoming more conservative during crises or after SOX act.