credit-assessment

Vocabulary Word

Definition

'Credit assessment' is the process that a bank or financial institution uses to decide how much of a credit risk a person is. It's like a report card on how good someone is at paying back money they borrow.

Examples in Different Contexts

Credit assessment in banking involves evaluating the creditworthiness of individuals or businesses applying for loans. A banker might say, 'Our credit assessment process includes reviewing applicants' financial statements and credit history to ensure they can repay the loan.'

Practice Scenarios

Tech

Scenario:

Our AI model needs refining to ensure its making accurate predictions on customer payment behavior.

Response:

Incorporating a broad range of variables in our credit assessment algorithm can improve its accuracy.

Operations

Scenario:

Our main supplier has experienced some cash flow issues. Already, there have been delays in deliveries.

Response:

It's concerning, indeed. We should do a credit assessment of our supplier to estimate their financial reliability.