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Essay / Research Paper Abstract
This 8 page paper looks at what is meant by the term credit analysis, and how these are used by lenders in order to assess risk and use the result to limit or control their exposure to risk. The last part of the paper then looks at the main causes of defaults. The bibliography cites 6 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEcreditanal.rtf
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Unformatted sample text from the term paper:
firm. The analysis will take place it the collection of a range of data sources, which can include information form credit reference agencies, information gained form internal recorded, for a
bank this may be looking at the way the account has been managed in the recent past, or for a firm this may be looking at the way the account
has been paid and patterns of payments. There is also the ability to take into consideration other information that is provided by the party being analysed. For example, these may
include facts such as the current income and expenditure, other commitment that are not debt commitments, for example, utility bills, for includes using disposable income the presence of children may
be an influence. This is the collection of a range of personal or relevant data by the company. The data will be taken and then processed in order to
give result according to an analysis model that is used by the bank or other lender. There are different models that can be used, these will all seek to
assertion the level of risk that lending to the potential borrower will present. All borrowers will present some level of risk. The analysis aims to assess whether or not that
risk is acceptable, the level of risk that the analysis creates may also be used to determine the interest rate that will be charged. Many lenders may lend to higher
risk clients at a higher, or sub prime rate. The analysis is to look at the applicants in subjectivity using only the relevant credit data to determine if the level
of risk is acceptable to the lender. Part 2 Creditworthiness is calculated by a number of risk drivers, not only the issuers level of creditworthiness, but the
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