What is Security Ratings

Security ratings transform months of vendor questionnaires into minutes of actionable insight. For GRC analysts managing hundreds of third-party relationships, these scores provide immediate visibility into vendor security posture through automated external monitoring.

The challenge: traditional vendor assessments require 40-80 hours per vendor annually. Security ratings reduce initial screening to under 5 minutes while maintaining continuous monitoring between formal assessments. Major providers like BitSight, SecurityScorecard, and RiskRecon scan millions of companies daily, tracking everything from patching cadence to malware infections.

But ratings aren't magic. They measure what's visible externally—network hygiene, configuration issues, breach history—not internal controls or process maturity. Smart programs use ratings for vendor tiering, continuous monitoring, and risk prioritization while maintaining traditional assessments for critical vendors.

How Security Ratings Work

Security ratings platforms continuously scan internet-facing assets to build risk profiles. The methodology follows four core steps:

1. Asset Discovery: Platforms map all digital assets belonging to an organization—domains, IP ranges, cloud instances, certificates
2. Data Collection: Automated scanners probe these assets for security indicators (open ports, SSL strength, patch levels, DNS configuration)
3. Risk Scoring: Algorithms weight findings based on severity and calculate composite scores
4. Continuous Updates: Scores refresh daily or weekly as new data arrives

The scoring models vary by provider but typically include:

Category	Weight	Example Indicators
Network Security	20-30%	Open ports, vulnerable services, SSL/TLS configuration
DNS Health	10-15%	SPF/DMARC records, subdomain hijacking risks
Patching Cadence	15-25%	Time to patch critical vulnerabilities
Application Security	10-20%	Web application headers, content security policies
Breach History	15-25%	Data breaches, credential leaks, malware infections
IP Reputation	5-15%	Spam blacklists, botnet participation

Regulatory Requirements and Framework Alignment

Multiple regulations now mandate continuous vendor monitoring:

NYDFS Cybersecurity Regulation (23 NYCRR 500.11): Requires "periodic assessment of Third Party Service Providers based on the risk they present." Security ratings satisfy the "periodic" requirement when combined with annual assessments.

OCC Third-Party Risk Management Guidance (2013-29): Emphasizes "ongoing monitoring" proportionate to risk level. Security ratings enable the continuous monitoring component for lower-tier vendors.

EU DORA (Digital Operational Resilience Act): Article 28 requires "continuous monitoring" of ICT third-party risk. Security ratings provide the technical implementation for this requirement.

ISO 27001:2022 Control A.15.1.2: Mandates monitoring supplier security performance. Security ratings automate evidence collection for this control.

SOC 2 CC9.2: Requires assessment and monitoring of vendor risks. Security ratings demonstrate continuous monitoring between point-in-time assessments.

Practical Implementation Strategies

Vendor Tiering with Security Ratings

Most organizations implement a risk-based approach:

Tier 1 (Critical): Score threshold <70

• Full annual assessment required
• Monthly rating monitoring
• Quarterly business reviews
• Dedicated remediation plans

Tier 2 (High): Score threshold 70-80

• Biennial full assessment
• Monthly rating monitoring
• Semi-annual check-ins
• Targeted remediation for drops >5 points

Tier 3 (Medium): Score threshold 80-90

• Questionnaire-based assessment
• Quarterly rating monitoring
• Annual review cycle
• Remediation for drops >10 points

Tier 4 (Low): Score threshold >90

• Rating-based monitoring only
• Semi-annual rating review
• Exception-based engagement

Control Mapping to Rating Categories

Security ratings map to specific control families:

Rating Component	NIST CSF	ISO 27001	SOC 2 TSC
Network Security	PR.AC-4, PR.DS-2	A.13.1, A.13.2	CC6.1, CC6.6
Patching Cadence	PR.IP-12	A.12.6	CC7.1
DNS Health	PR.AC-5	A.13.2.1	CC6.7
Application Security	PR.IP-2	A.14.2	CC7.1, A1.2

Integrating Ratings into Vendor Lifecycle

Onboarding (Day -30 to 0):

• Pull baseline security rating
• Set minimum score thresholds by vendor category
• Include rating requirements in contracts
• Establish remediation timelines

Ongoing Management (Continuous):

• Automated weekly score pulls via API
• Alert triggers for score drops >5 points
• Monthly trending reports by vendor tier
• Quarterly aggregate risk reporting

Incident Response (As Needed):

• Immediate rating check post-breach announcement
• Historical trend analysis for root cause
• Peer comparison to assess relative impact
• Evidence for contract enforcement

Common Misconceptions and Limitations

Misconception 1: "Ratings replace assessments" Reality: Ratings measure external hygiene, not internal controls. A perfect rating doesn't guarantee strong access management or data governance.

Misconception 2: "All rating providers measure the same things" Reality: Score variance of 20+ points between providers is common. Each uses different data sources, scoring algorithms, and update frequencies.

Misconception 3: "Low ratings always indicate high risk" Reality: False positives occur. A subsidiary domain with outdated certificates might tank scores despite zero actual risk to your data.

Misconception 4: "Ratings are real-time" Reality: Most providers update weekly. Critical vulnerabilities might exist for days before appearing in scores.

Industry-Specific Considerations

Financial Services: Regulators expect rating integration but not rating reliance. Document how ratings complement traditional assessments. Some banks require vendors to maintain scores >80.

Healthcare: HIPAA doesn't mandate security ratings, but they demonstrate "reasonable safeguards" for business associate monitoring. Focus on breach history and encryption indicators.

Technology: SaaS vendors typically score 85-95. Scores below 80 often indicate startup growing pains rather than negligence. Weight application security and API security more heavily.

Manufacturing: OT environments create rating challenges. Many legitimate industrial systems appear "vulnerable" to external scans. Supplement ratings with OT-specific assessments.

Frequently Asked Questions

How accurate are security ratings compared to penetration tests?

Security ratings catch different issues than penetration tests. Ratings identify 60-most externally visible vulnerabilities but miss internal configuration issues. They excel at continuous monitoring between point-in-time assessments.

What's a "good" security rating score?

Scores vary by industry and provider. Generally: 90+ (excellent), 80-89 (good), 70-79 (fair), below 70 (poor). Financial services vendors average 82-87, while healthcare averages 75-80.

Can vendors dispute their security ratings?

Yes. Most providers offer dispute processes taking 5-10 business days. Common disputes involve asset attribution errors, false positives, and outdated breach data.

How do security ratings handle cloud environments?

Modern platforms recognize major cloud providers (AWS, Azure, GCP) and attribute shared responsibility correctly. However, misconfigured S3 buckets or exposed databases still impact scores appropriately.

Should security rating requirements go in contracts?

Yes, but carefully. Require "commercially reasonable efforts to maintain a security rating above [X]" rather than absolute thresholds. Include cure periods and dispute rights.

How much do security rating platforms cost?

Entry-level packages start around $25,000 annually for 50-100 vendors. Enterprise licenses for unlimited vendors range from $100,000-500,000 depending on features and API access.

Do security ratings work for small vendors?

Coverage varies. Providers typically rate companies with 50+ employees and dedicated IT infrastructure. Smaller vendors might have incomplete or missing scores.