credit risk
Borrower reliability concern
Credit risk is the possibility that a borrower will fail to repay a loan or meet financial obligations.
Banks and lenders assess credit risk before extending credit: The bank declined the loan due to excessive credit risk.
The term also refers to a borrower's likelihood of default: Subprime borrowers are considered a higher credit risk.
In finance, credit risk shapes interest rates, lending decisions, and bond pricing.
Failure to settle debts
- delinquencyCriminal or neglectful behavior
- bankruptcyLegal status when insolvent
- insolvencyInability to pay debts
- arrearsOverdue financial obligations
charge-off · write-off · bad debt · foreclosure · restructuring · workout · recovery · collection
One who takes temporarily
- lenderOne who loans money
- loanBorrowed money repaid later
- mortgageSecured home loan
- principalChief school administrator
interest rate · repayment · term · secured · unsecured · collateral · amortization · installment
Ability to repay debts
- scoringEarning points in competition
- ratingAssigned evaluative score
- evaluationDetermining worth or quality
- modelingSimulating or demonstrating form
underwriting · due diligence · metrics · indicators · forecasting · appraisal · criteria · judgment
Other side in deals
- concentrationSustained single-minded attention
- portfolioCollected works or assets
- diversificationExpanding into varied areas
- limitMaximum allowed extent
mitigation · collateral · guarantee · hedging · securitization · netting · covenants · watchlist
nonpayment
Failure to settle debts
- delinquencyCriminal or neglectful behavior
- bankruptcyLegal status when insolvent
- insolvencyInability to pay debts
arrears · charge-off · write-off · bad debt · foreclosure · restructuring · workout · recovery · collection · repossession
borrower
One who takes temporarily
principal · interest rate · repayment · term · secured · unsecured · collateral · amortization · installment · origination
creditworthiness
Ability to repay debts
- scoringEarning points in competition
- ratingAssigned evaluative score
- evaluationDetermining worth or quality
modeling · underwriting · due diligence · metrics · indicators · forecasting · appraisal · criteria · judgment · stress testing
counterparty
Other side in deals
- concentrationSustained single-minded attention
- portfolioCollected works or assets
- diversificationExpanding into varied areas
limit · mitigation · collateral · guarantee · hedging · securitization · netting · covenants · watchlist · downgrade
- creditcreditworthiness, creditor, creditors, creditworthy, FICO
- mortgagesfixed-rate mortgage, mortgage broker, adjustable-rate mortgage, mortgage payment, mortgage insurance
- business riskscompetition, data breach, cyberattack, recession, lawsuit
- Credit ReportsEquifax, Experian, TransUnion, FICO, FICO score
- credit scoresFICO score, creditworthiness, payment history, FICO, Equifax
- credit termsloans, installment loan, monthly payment, interest rate, installments
credit riskmarket risk
Exposure to price fluctuations
market volatility · interest rate risk · inflation risk · political risk
risk, credit, incredible, credible, credibility, discredit, incredibly, credits, incredulous