Are we foolish to trust the credit reporting agencies?

Question by Joe in texas: Are we foolish to trust the credit reporting agencies?
Since they do not use debt/equity ratios or income amounts to calculate credit risk.
The credit rating agencies gave a high rating to institutions with bad loans given to unworthy borrowers in the sub-prime mortgage mess. Are the consumer credit rating agencies creating a bigger disaster with their voodoo credit rating system?

Credit rating agencies are now under scrutiny for giving investment-grade ratings to

Loans Bad Credit Loans