Moody's on Oct. 18 upgraded Credit Acceptance Corp.'s corporate family and senior unsecured ratings to Ba3 from B1.

The ratings outlook is "stable."

The upgrade is based on the company's solid performance propelled by its disciplined approach to pricing, which continues to produce strong profitability, Moody's said.

The rating agency also noted that the company's profitability, capital and leverage continue to be healthy amid a competitive environment in subprime auto lending.

Moody's also said that the company's ratings are supported by its risk-mitigating business model with its portfolio program where dealers have first loss risk in the receivables they have assigned to the company.