This work investigates the effects of management quality issues embedded in structural form credit models on firm’s credit risk evaluation using American firm data from 2000 to 2008. The findings of this research show that management quality significantly relates to the deviations in the credit risk evaluation of structural form models from agency ratings. This study finds three factors explaining 18.25% to 25.26% of the deviation and should be incorporated into credit risk modeling. Additionally, the effects of management quality positively relate to the deviation and confirm that the effects of the increase in asset volatility dominate those of the decrease in agency cost due to improvement in management quality.