With the enactment of the Dodd Frank legislation, the Federal Government signaled an expansion of regulations as their response to the recent failure of bond rating agencies to detect and report on the financial distress of their clients. In this paper we study how competition, as an alternative to regulation, improves the timeliness of bond downgrades and helps investors assess the risks associated with their investments. For three distinct financial scenarios we find that when there are multiple bond rating agencies rating the same issue, rating agencies provide investors with more accurate and/or more timely information about the riskiness of the rated debt issue. In the case of new bond issues, we find evidence to support increased competition among bond rating agencies leading to more accurate pricing at the time of the bond issuance. In the case of corporate restatements and recognition of bond defaults, competition among rating agencies leads to the more timely recognition of both unintentional restatements and default.