credit policies
Borrowing approval rules
Credit policies are the rules and guidelines an organization uses to determine who qualifies for credit and on what terms.
Banks, retailers, and other lenders establish credit policies covering minimum credit scores, income requirements, interest rates, and repayment periods.
A company's credit policies also govern how it extends payment terms to customers: Their credit policies require payment within thirty days.
Strict credit policies reduce risk but may limit sales; lenient ones do the reverse.
- interest ratesPrice paid for borrowing
- creditworthinessAbility to repay debts
- loan termsBorrowing agreement specifications
- anti-discrimination policiesRules forbidding prejudicial treatment
- debt trapSelf-perpetuating financial burden
consumer protection laws · repayment schedules · debt-to-income ratio · licensing requirements · dispute resolution · risk tolerance · payment plans · account management · grace periods · late fees · hardship programs · guarantors · fine print · fraud detection · customer service · economic growth · loyalty programs · predatory lending
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