The lenders themselves spend a lot of effort on making sure that the credit ratings are good signals. When your business is extending credit (typically very lo

The lenders themselves spend a lot of effort on making sure that the credit ratings are good signals. When your business is extending credit (typically very low margin) you walk a very fine line between being overly permissive in lending and not lending enough. Minor movements of that line can be the difference between profitability and not. If a ratings agencies algorithm was shown to be changing to be too aggressive (either historically or against its peers) the lenders will dial back its importance in their own decisions. In the extreme to the point of not paying for it anymore. This internal competition does a pretty good job of making sure the algos represent the current state of the world. There is a question of about this system causing future systemic risk to be underpriced because no one is incentivized to investigate it fully and add it to their algorithm.