The present invention provides a catalytic cracking catalyst for heavy oil and preparation methods thereof. The catalyst comprises 2 to 50% by weight of a phosphorus-containing ultrastable rare earth Y-type molecular sieve, 0.5 to 30% by weight of one or more other molecular sieves, 0.5 to 70% by weight of clay, 1.0 to 65% by weight of high-temperature-resistant inorganic oxides, and 0.01 to 12.5% by weight of a rare earth oxide. The phosphorus-containing ultra-stable rare earth Y-type molecular sieve uses a NaY molecular sieve as a raw material. The raw material is subjected to a rare-earth exchange and a dispersing pre-exchange; the molecular sieve slurry is then filtered, washed with water and subjected to a first calcination to obtain a rare earth sodium Y molecular sieve which has been subjected to such "first-exchange first-calcination", wherein the steps of rare earth exchange and dispersing pre-exchange are not restricted in sequence; and then the rare earth sodium Y molecular sieve which has been subjected to "one-exchange one-calcination" is subjected to "second exchange and second calcination" including ammonium exchange and a phosphorus modification, wherein the steps of the ammonium exchange and the phosphorus modification are not restricted in sequence. The steps of the ammonium exchange and the phosphorus modification can be conducted continuously or non-continuously, the second calcination is conducted after the ammonium exchange for reducing sodium, the phosphorus modification can be conducted before or after the second calcination. The catalyst provided by the invention has the characteristics of high heavy oil conversion capacity, high total liquid yield, and high yield of light oil.