This paper is intended as an investigation of a Markov model for credit migration with macroeconomic factors. The model modifies Wei (2003), developing the time-varying transition matrices which depend on the business cycle, to value credit derivatives. However, Wei (2003) adjusts the macroeconomic fluctuations according to numerical method. The question about which factors influence the fluctuations remains unsettled. Alternatively, we follow Kim (1999), constituting the credit cycle index, to develop AR (1) model. It offers the key to an understanding of the identification of the different impacts on macroeconomic variables. In this paper, we refine four macroeconomic variables to explain the business cycle deviation. It is noteworthy that this paper develops a calibration process which is better for estimating the risk-neutral credit migration.