Recent advances in credit risk management have been driven by changes in the market for credit products and techniques. The growth of credit derivatives has led to the need for new methods in modeling credit risk. The upcoming Basel II regulations will require banks to use internal or external rating systems to determine capital requirements. However, current methods may underestimate risk due to the limitations of using the normal distribution and correlation as measures of dependence. The use of copulas, which allow for more diverse dependence structures, could help address these deficiencies.