I would have thought that Credit Ratings was actually actually mostly self-regulated, with the government only providing a framework for privacy and complaints etc.
In australia, we have numerious laws around credit contracts etc, but how your 'rating' is determined is upto the individual companies. Ie, there is actually no certal agency which determines your credit rating, rather each credit providing institution determines their own approach to providing credit to individuals and companies. There are private companies which are used to provide credit history and agencies often inform them of defaults etc, but that's it.
In Australia, the reason financial institutions look at credit application history rather than actual borrowings is that due to Privacy, they can't actually see what credit you have except when a default of some sort has been regestered with one of these independent credit checking agencies. Therefore, in their risk adverse manner, they usually default to assuming that each application has potentially resulted in additional credit. However, most agencies are run by humans, and not machines, so these things can be negotiated after the initial credit application decline, ie a quick, reasonable explanation that your were shopping around usually helps.
To an extent, it generally is self-regulating; the law set down the guidelines for how credit should work, and three companies here are the major regulators (Experian, Trans Union, and Equifax). They generally run the day-to-day operations, but need to follow the guidelines the law originally set down (although interpreting the law is up to each company individually, which is why your credit rating can differ between one of the three, or even be different for all three companies). When a business is sending in an application for credit/loans, the lender will contact one (or more) of these companies to determine what your rating is, and to view what information is public (such as being delinquent on payments, or how much debt versus reported yearly income there is) to determine if you are eligible for the applied for credit/loan, and also use that information to determine exactly how much they can offer. Most lenders can get a fairly broad look at your credit history, and each look by every lending institution the company contacts is a negative hit against your credit rating.
The only way to repair your rating is to make payments on time, and stay away from credit/loan applications; over time, your credit rating will return to its previous rating, assuming that there aren't more hits or you do not get reported for delinquent payments. Experian, Trans Union, and Equifax have been trying to push for a change in the law for several decades now, so that the simple act of looking at someone's credit rating, no matter how many times, does not effect a person's rating negatively. Instead they want only more debt being accrued to lower someone's rating (as well as missing payments and such, of course).