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Process of Credit
Application
Goods and services can be paid for upfront or on
delivery, or are supplied on credit (where payment is
deferred for a period of time after the goods or services
have been supplied).
Offering credit increases the risk of being paid
late, or not at all, so for new customers one should
always consider upfront or on delivery payments, also
in situations where one has outlaid large amounts of
money to supply the goods or service.
The present Unit on ‘Process of Credit Application’
covers various aspects like features and conditions
for credit sales, identifying credit checks and
getting authorisation, describing the process of
credit requisitions, demonstrate the techniques for
determining creditworthiness. This Unit deals with the
features of credit sales, credit sales agreement, retail
credit facility flexibility, and terms and conditions. It
also covers the difference between sales and agreement
to sale. Contract of sale, conditions and warranties,
credit checks and getting authorisation have also
been discussed.
While granting customer credit, the sales associate
has to follow certain steps, which include creation of
credit policy, obtaining credit application, checking
customer references, getting a personal guarantee, run a
credit check, setting limits of credit and payment terms.
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The credit requisition contains information on the desired products, details of possible vendors, delivery instructions, accounting details, contact information, etc. The sales associate has to follow the criteria in processing credit sale application. Before credit sales are permitted, the sales associate or the retailer has to obtain creditworthiness of a buyer.
With this background in view, the present Unit has been divided into four sessions. The first session deals with the features and conditions for credit sales, and covers retail credit facility, terms and conditions in credit sales. The second session is on credit checks and getting authorisation. It focusses on the legal and company procedures for carrying out credit checks and getting authorisation. The third session is devoted to processing credit requisitions and deals with documentation requirements. The last, i.e., the fourth session deals with techniques determining the creditworthiness.
Session 1: Features and Conditions for Credit Sales
Credit sales refer to sales that involve extending credit to the customer. The customer takes the product now and agrees to pay for it later. Credit sales are a type of trade credit. They create receivables, or money owed to the company from customers.
Credit sales terms often require payment within one month of the invoice date but may also be for longer periods. The due amount may be collected in different forms, such as lump-sum payment, hire purchase system and instalment purchase system. Retail firms sell goods on credit due to the following benefits:
• Meet the competition: When competitors are making sales on credit to customers, any business will need to do the same just to stay competitive.
• Increase in sales: An increase in sales may or may not happen when one starts selling on credit. If your competitors are not offering credit terms, then you will gain sales by offering credit terms,
Sales Associate – Class XI
because your customers will buy from you instead, of having to pay cash, of your competitors.
• Better customer loyalty: Offering credit to customers indicates that you respect and trust them to pay before their due dates. Customers will reward these gestures of confidence by continuing to buy from you.
Characteristics of credit sales
Credit sale is selling goods to a customer by transferring from seller to the customer without paying the money immediately. Payment of goods can be done as per the agreement. The characteristics of credit sale are as given below.
• The transferor, normally, deals in goods and services.
• The title of the goods lies with the seller before it is sold on credit.
• There are fewer formalities, especially, in case of open account.
• It is, usually, extended for three months. • It depends on terms imposed by the seller. • No security is required.
• It can be facilitated with different financial institutions with easy terms and conditions at a continuous rate.
• Almost half of short financial requirement of retail is met by this type of mutual trust and cordial relations.
Credit sale agreement
A credit sale agreement is an agreement for the sale of goods under which the purchase price, or part of it, is payable by instalments.
Definition of ‘retail credit facility’
Retail credit facility is a financing method, which provides loan facility to retail consumers for purchasing goods and services. Retail credit facilities lend funds to customers wanting to purchase high-valued items
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Process of Credit Application
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but are short on capital. Thus, retail credit facilities may enable a greater number of consumers access to a retailer’s goods. The risk of default is the main factor behind high rate of interest rate charged by retail credit facilities.
Structure of a credit agreement
Thus, retail credit facilities may enable a greater number of consumer access to a retailer’s goods. A credit agreement details the borrower’s responsibilities. It includes details of loan warranties, lending amounts, interest rates, loan duration, default penalties, and repayment terms and conditions. The contract includes basic information of the customer and also the purpose of the loan.
Repayment terms of credit facility
The repayment terms include the interest rates and date for repayment in case of a term loan, minimum payment amount and recurring payment dates, or a revolving loan. The agreement details whether interest rates may change and specifies the date on which the loan matures, if applicable.
Conditions used for sale of goods on credit
A contract of sale is a legal contract for the exchange of goods, services or property from seller to buyer for an agreed upon value in money paid or the promise to pay the same. It is a specific type of legal contract. There are some provisions in a contract of sale, which have been discussed below.
• The contract of sale is an agreement, in which a seller agrees to transfer goods to a buyer at a price. It is made when there is both an offer as well as an agreement to buy or sell goods for a price.
• It can be made in writing or by word of mouth. • A contract of sale is a generic term, which includes: (a) Sale and (b) Agreement to sell.
Agreement to sell
Agreement to sell constitutes the terms and conditions of sale by the seller to the buyer. These terms and
Sales Associate – Class XI
conditions include the amount at which it is to be sold and the future date of full payment.
Essential elements of contract of sale
There are various essential elements which must be present in a contract of sale. These are as given below. (a) Essential elements of a contract: All other essentials of a valid contract as per the Indian Contract Act, 1872, must be present. The parties of a contract must be competent, their consent must be free, and the objective of the contract must be lawful and so on.
(b) Bilateral contract: To make a contract of sale there must be at least two parties. These parties must be distinct, i.e., a seller and buyer.
(c) Transfer of property: In a contract of sale, the objective is to transfer the general property from the seller to the buyer in case of goods.
(d) Goods: The subject matter of the contract of sale of goods must be some goods. The purpose of this contract is to transfer the property in these goods from the seller to the buyer.
(e) Price — the consideration: In a contract of sale the consideration is ‘price’. Price or consideration may by partly in money and partly in goods.
Difference between condition and warranty
In a contract of sale, the subject matter is ‘goods’. There are many sale transactions which occur in normal course all around the world. There are certain provisions which need to be fulfilled because it is demanded by the contract. These prerequisites can either be a condition and warranty. The condition is the fundamental stipulation of the contract of sale, whereas, warranty is an additional stipulation.
In other words, condition is the arrangement, which should be present at the time of happening of another event, whereas, warranty is a written guarantee issued to the buyer by the manufacturer or seller, committing to repair or replace the product, if required, within a specified time. The difference between condition and warranty have been listed below.
Activity 1
A role-play to learn the process of credit sales in retail business
Material required
Checklist, notebook and pen or pencils
Procedure
1. Divide the class into groups of three and ask them to perform
the following activities in the retail lab.
Role-play situation
A customer enters a retail store and asks the retailer to sell
the goods on credit to him or her and the customer sales
associate decides to sell the goods on credit to him or her.
1st student: A customer seeking credit
2nd student: Customer sales Associate (Retailer)
3rd student: Store manager
2. Finish the play within the time allotted to you.
3. Discuss the learnings from the activity and the points to
be covered.
4. Share your views before and after the role-play activity.
Activity 2
A field visit to learn the terms and conditions adopted by retailers
for credit sales
Material required
List of retail stores, notebook and pen or pencils
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Sales Associate – Class XI
Procedure
1. Visit a nearby retail store.
2. Examine the terms and conditions adopted by the retailers for credit sales.
3. Discuss the findings with your teacher.
3. Prepare and submit a report based on your observation.
Activity 3
Field visit to learn features of credit sales
Material required
Questionnaires, list of retail stores, notebook and pen or pencils Procedure
1. Visit retail stores near your home or school.
2. Observe if the following activity or situation exists at the stores. Tick mark the appropriate.
3. Identify the need for customer’s credit facility form. 4. Understand how a retail firm is selling goods on credit. 5. Study the terms and conditions stipulated for the sale of goods on credit.
6. Collect the details.
7. Discuss with friends, teachers, officials of retail store and then finalise.
8. Submit the field visit report to your teacher.
Check Your Progress
A. Fill in the blanks
1. When goods are sold without receiving immediate ____________, it is called a credit sale.
2. Credit sales are made between a _____________ and a ____________________ with a buyer agreeing to pay in instalments.
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B. Multiple choice questions
1. A requirement or event that should be performed before the ______________, is known as ‘Condition’.
(a) completion of another action
(b) agreement
(c) treatment
(d) None of the above
2. Which of these is an essential element of a contract of sale?
(a) Transfer of property
(b) Money consideration
(c) Goods
(d) All of the above
C. State whether the following are True or False 1. There must be at least three parties for contract of sale. 2. In a contract of sale, the consideration is price. 3. Agreement to sell means a contract of sale.
D. Match the columns
1. Assurance
2. Consideration of contract of sale
3. Section 12(2) of the Indian Sale of Goods Act, 1930
4. Price D Transfer of ownership
E. Short answer questions
1. Define credit sales.
2. What are the benefits of credit sales?
3. What is a credit sale agreement?
4. What is retail credit facility?
5. Explain agreement to sell.
F. Long answer questions
1. Explain the features of credit sales.
2. What conditions are used for the sale of goods on credit? 3. Write the differences between condition and warranty. 5. What are the essential elements of a contract of sale? G. Check your performance
1. Demonstrate the essentials of a contract of sale. 2. Demonstrate the features of credit sales.
Sales Associate – Class XI
Session 2: Credit Checks and Getting Authorisation
Any retail store’s primary objective is to enhance profits. Therefore, there is a need to identify potential customers for making credit sales. Keeping this in mind, creditors must conduct credit check in order to understand whether the customers have repaying capacity or not. This can reduce the risk of bad debts for the retailing firm.
Meaning of credit check
Credit check is a sort of search performed by the retailer to evaluate a customer’s creditworthiness. After a credit check the retailer is able to assess whether the customer can handle his or her money matters and fulfill the requirements for credit.
Need for credit checking
There is a need for credit check as it helps the retailer to assess if a customer is creditworthy. Given below are some of the reasons for conducting a credit check.
• Credit check protects the interests of parties. It also ensures that each party has the capacity to enter into a transaction.
• Retail firms should run a credit check on customers any time whenever the customers apply for a loan, hire purchase, credit card, store card or line of credit.
• A credit check provides information about the customer’s mortgage, credit cards, arranged overdrafts, personal loans, car finance, hire purchases, and repayment history of phone accounts, etc.
• A credit record is basically an account of any type of credit of the customer given for the last six years. It reveals how much money is being accessed by the customer and if the customer has failed to make any obligations, etc.
• When applying for credit, the customer is asked by the lender for his or her consent to check the customer’s credit file. This allows them to
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see a number of things, such as address of the customer, current commitments and reliability of the customer.
The criteria vary from customer to customer. It is based on the financial profile and credit history.
Positive credit reporting
In the past, credit check included ‘negative’ behaviour, which took place when a customer failed to meet obligations in financial dealings. The credit score is now calculated on the basis of this information, together with other credit activity in the customer’s file, such as previous enquiries from credit providers. This provides a clear picture of the customer’s finances, and shows if the customer has recovered from any credit difficulty in the past.
Procedure for credit check on a prospective customer
Checking credit is an important step before issuing credit. It allows you to make an informed decision about the level of risk associated with extending credit to the customer. Before retail firms extend credit to a customer, it is an important step to check a customer’s credit history.
Before offering credit, the retailers gets a credit application form filled in and signed by the customer. The information to be collected from the customers for credit check is as follows:
• Release of information: In order for the retailer to do a complete credit check on a customer, they will need the customer’s permission.
• Signature: A signature on the credit application form means that the customer has read and understood all the terms and conditions listed and also agrees with them.
• Address: Having the correct address will assure that a credit check pulls up the right information. • Employment: Accurate employment information of the customer allows the retailers to take a look into the customer’s employment history to see how long he or she was at each job.
Sales Associate – Class XI
Legal and company procedures for getting authorisation
A person’s credit history is private. Therefore, a retail firm needs to seek permission from the customer before accessing any information legally.
How to get credit report
Customers provide the necessary information for credit purchase. A retailer accesses the information and makes a report. The retailer can directly ask the customers for their creditworthiness and write it in their credit report.
Steps to follow before granting credit
If a business firm decides to offer credit terms to the customers, it should try to ensure that these customers will be both willing and able to pay in accordance with the agreed-upon terms. It is recommended that the firms follow a structured process for this. Therefore, a firm may consider the following steps.
• Create credit policy: Every retail store must create its credit policy. It will help the store in running the retail business. It includes payment policies and expectations.
• Customers must complete the credit application: The application should provide key information about the customers.
• Check the customer’s references: Asking customers to list references also helps.
• Run credit check: It will help in revealing any outstanding payments against the customer.
• Request personal guarantee from customer: It is not necessary in the case of a retail store, however, it is a personal guarantee from the customer.
• Take security interest in products: As customers can refuse to pay according to the agreed upon terms, a retailer should ideally charge security interests.
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• Set credit limits and payment terms: Set limits for the customer who seems to be creditworthy. Also decide how many days after the delivery of the products the full payment will be made.
Activity 1
A role-play to learn the process of credit sales in retail business Material required
Checklist, notebook and pen or pencils
Procedure
1. Divide the class into groups of three and ask them to perform the following activities in the retail lab.
Role-play situation
A customer enters the retail store and requests to sell the goods on credit. Now, understand how the retailer makes a credit check before selling the goods on credit.
Role of students
1st student: A customer
2nd student: Customer sales associate (Retailer)
3rd student: Store manager
2. Finish the play within the time allotted to you. 3. Discuss the learnings from the activity and the points to be covered.
4. Share your views before and after the role-play activity.
Activity 2
A field visit to learn the practices adopted for making credit check Material required
Checklist, list of retail stores, notebook and pen or pencils Procedure
1. Visit a nearby retail store.
2. Examine the practices adopted by the retailers for making credit check.
3. Prepare a report based on your observation.
Activity 3
A field visit to learn credit check and getting authorisation in a retail business
Material required
Checklist, list of retail stores, notebook and pen or pencils Sales Associate – Class XI
Procedure
1. Visit a retail store near your home or school.
2. Observe the following activity or situation that exists in the store.
3. Tick mark the appropriate option.
3. Study what are the legal and company procedures for getting authorisation for credit check.
4. Collect all the details.
5. Discuss the details with your teacher and authorities of the retail store.
6. Prepare a report on the basis of your observations and submit it to your teacher.
Check Your Progress
A. Fill in the blanks
1. Credit check strategy is adopted by retailers to check the customer’s _________________.
2. Retail firms must have _________________________________ from customer.
B. Multiple choice questions
1. The main objective of a credit check is to manage the risk of ______________.
(a) bad debts
(b) credit sales
(c) cash sales
(d) None of the above
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2. Before retail firms extend credit to a customer, it is the best practice to check the prospective customer’s ________________.
(a) profile of the customer
(b) history
(c) background
(d) None of the above
3. ______________ is the risk involved in offering credit. (a) Financial risk
(b) Reduced cash flow
(c) Increased cash flow
(d) None of the above
C. State whether the following are True or False 1. Credit check is a type of search.
2. Credit checking is not needed to protect the interests of the parties concerned.
3. A credit record is basically an account of any type of credit. 4. Approval from the customer is not required while credit check of his/her account.
D. Short answer questions
1. What is the meaning of credit check?
2. What is positive credit reporting?
E. Long answer questions
1. What is the legal and company procedures for carrying out credit checks?
2. Explain the need for credit checking.
3. Elaborate the steps that need to be followed before granting customer credit.
4. How is the credit report of a customer obtained?
G. Check your performance
1. Demonstrate the legal and company procedures to be followed for carrying out credit checks.
2. Draw a chart on the steps to be followed before granting customer credit.
Session 3: Processing Credit Requisitions
Requisition is a formal request by a buyer to the seller to sell the desired goods on conditions agreed upon. It, generally, includes the brand and model name, quantity and the required delivery date, etc. When a requisition is made by a buyer to the seller to provide credit facility for the purchase of goods it is known as ‘credit requisition’. The rules for availing credit facilities are normally provided by the organisation.
Sales Associate – Class XI
Credit requisition
A credit requisition is a request for credit. A valid credit requisition includes the amount and type of credit requested. It also includes the applicant’s credit score, report and means of security for the loan. Normally, credit limits are prescribed by the vendor.
Credit limit means the maximum amount of money extended through a line of credit and the maximum amount of credit allowed to a customer to purchase in a retail store.
The credit requisition document requires information about the following:
• Desired items or services: Customers who are seeking credit facility must mention the details of the desired items or services to be purchased on credit from the retail store.
• Possible vendors to fulfill order: It must contain the details of the possible vendors who can supply the required goods to the customer or buyer.
• Any budget quotations or proposals received: It should contain information about the vendor’s name and other details of quotations or proposals received.
• Delivery instructions: The credit requisition should contain information about delivery instructions of the goods.
• Capture initial capital details: The detailed information about initial capital must be provided in the credit requisition.
• Contact information: The buyers who want to purchase goods on credit must mention their contact information in this requisition.
• Related accounting detail: It should also provide information about related details of accounting.
Process of applications
The following performance criteria must be followed for processing applications from retail customers for credit facilities.
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1. Identify the customer’s needs and provide credit facilities.
2. Clearly explain the features and conditions of credit facilities to the customer.
3. The customer should submit the application, and the requisition must be approved by the retailer. 4. Promptly refer to difficulties in processing applications.
5. Once approved, the requisitions go to the sales manager for authorisation procedures.
Activity 1
A role-play to learn the processing of credit requisition Material required
Checklist, notebook and pen or pencils
Procedure
1. Divide the class into groups of three.
Role-play situation
A customer enters a retail store and asks the retailer how to process credit requisition for purchasing goods on credit. Now, the retailer has to explain about the documents required for credit requisition and ask the customer to perform the following activities in a retail lab.
Role of students
1st student: A customer asking about credit requisition 2nd student: Customer sales associate
3rd student: Store manager
2. Other students of the class can ask questions to the performing group.
3. Finish the play within the time allotted to you. 4. Discuss the learnings from the activity and the points to be covered.
5. Share your views before and after the role-play activity.
Activity 2
A field visit to learn the documents for processing credit requisition of customer
Material required
Checklist, list of retail stores, notebook and pen or pencils Sales Associate – Class XI
Notes Procedure 1. Visit a nearby retail store.
2. Identify how a retail firm is keeping the various documents
required for processing credit requisition of the customers for
providing credit facilities.
3. Prepare a report based on the observation and submit to
your teacher.
Activity 3
A field visit to learn processing credit requisitions
Material required
Checklist, list of retail stores, notebook and pen or pencils
Procedure
1. Visit a nearby store and examine how a retail firm processes
the applications from the retail customers for credit facilities.
2. Observe the following activity or situation that exists at
the stores.
3. Tick mark the appropriate option.
3. Collect the detailed information.
4. Discuss the observations with your teacher and the
authorities at the retail store.
5. Prepare and submit a report based on your observations
made during the field visit.
Check Your Progress
A. Fill in the blanks
1. ________________ is the formal request by a customer to a
seller to sell the desired goods on conditions agreed upon.
2. A _____________________ is a request for credit.
3. __________________________ refers to the maximum amount
of money extended to a customer through line of credit.
4. Normally, credit limits are prescribed by the
___________________.
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B. Multiple choice questions
1. When a requisition is made by a buyer to the seller to provide credit facility for the purchase of goods, it is known as ________________.
(a) purchase requisition
(b) requisition
(c) credit requisition
(d) None of the above
2. Vendors, usually, set ____________________ based on information in the application of the person seeking credit. (a) credit limit
(b) debit limit
(c) standard limit
(d) None of the above
3. The credit requisition document requires information about the ___________________.
(a) items which are not desired
(b) desired items or services
(c) general information
(d) None of the above
4. __________________ is the performance criteria to be followed for processing applications from retail customers for credit facilities.
(a) Identifying the customer’s needs for credit facilities (b) Not identifying the customer’s needs for credit facilities (c) Both (a) and (b)
(d) None of the above
C. State whether the following are True or False 1. Requisition is an informal request by a customer to seller. 2. Credit requisition should contain information about the delivery instruction of goods.
3. Credit processing application does not provide time to customers for clarification.
4. Once approved, the application goes to the sales manager.
D. Match the columns
Sales Associate – Class XI
E. Short answer questions
1. What is credit requisition?
2. What is requisition?
F. Long answer questions
1. Explain the information required in credit requisition. 2. Discuss the process of credit application.
G. Check your performance
1. Draw a chart on credit requisition.
2. Demonstrate the steps involved in credit requisition.
Session 4: Techniques for Determining Creditworthiness
Several businesses have an established credit rating system to determine the creditworthiness of customers.
Meaning of ‘creditworthiness’
Creditworthiness is a valuation performed by the retailer that determines the possibility of a customer to default based on his or her earlier debt obligations. It considers factors like repayment history and credit score. Credit reporting agencies measure the creditworthiness of a customer.
How can customers improve their credit score
Individuals should pay on time, pay more than the minimum monthly payment, pay their debt faster and reduce the assessment of late fee to improve their credit score.
How to check customers’ creditworthiness
A retailer before extending credit should verify a customer’s ability to repay, among other things. To keep an eye on the customers and their ability to pay what they owe, the retailers should keep the following in mind:
(a) Require credit application: Every customer should be made to fill in the credit application.
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(b) Check publicly available information: Every retailer must check the customer’s information before issuing credit.
(c) Use credit evaluation tools: A retailer must use credit evaluation tools to calculate the customer’s creditworthiness.
Techniques used for determining
creditworthiness of customers
When retailers want to expand the credit to their customers, they are essentially willing to provide the customers credit equal to the amount of their purchases. The guidelines to be followed by the retailer is inclusive of ‘The Five Cs of Credit’, which are as follows:
• Character: This refers to the customer’s integrity and willingness to repay the financial obligation.
• Capacity: This addresses the customer’s cash inflow and ability to repay the debt.
• Capital: This refers to the customers’ financial net worth.
• Collateral: This refers to the security against credit.
• Conditions: These refer to the economic, family and personal conditions of the customers.
Activity 1
A role-play to learn assessment of creditworthiness of a customer Material required
Checklist, notebook and pen or pencils
Procedure
1. Divide the class into groups of three.
Role-play situation
A customer enters a retail store and asks the retailer to sell goods on credit. Now, the retailer has to assess the creditworthiness of the customer seeking credit.
Sales Associate – Class XI
Role of students
1st student: A customer seeking credit
2nd student: Customer sales associate
3rd student: Store manager
2. Other students of the class can ask questions to the performing group.
3. Finish the role-play within the time allotted to you. 4. Discuss the learnings from the activity and the points to be covered.
5. Share your views before and after the role-play activity.
Activity 2
A field visit to identify the assessment of creditworthiness of customers.
Material required
Checklist, list of retail stores, notebooks and pen or pencils Procedure
1. Visit a nearby retail store.
2. Identify how a retail firm is assessing the creditworthiness of customers for providing credit facilities.
3. Prepare and submit a report based on your observation.
Activity 3
A field visit to learn processing credit requisitions Material required
Checklist, list of retail stores, notebook and pen or pencils Procedure
1. Visit a nearby retail store.
2. Examine the techniques adopted by the retailers for determining the creditworthiness of customers.
3. Examine how the retail firm is analysing the financial statements of the customer, seeking credit, for determining the creditworthiness.
4. Observe the following activity or situation that exists at the stores. Tick mark the appropriate option.
S. No. Activity or situation Yes No
Notes
3. Are any techniques used for determining
the creditworthiness of the customers?
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6. Collect the details.
7. Discuss with teachers and authorities of the retail store. 8. Prepare and submit a report based on your observation.
Check Your Progress
A. Fill in the blanks
1. ________________ is a valuation performed by the retailer that determines the possibility of a customer to default on his or her debt obligations.
2. When retailers extend credit to their customers, they are essentially providing the customers a loan equal to the amount of their ________________.
3. ______________________ measures the creditworthiness of the customers.
4. ___________ is a customer’s financial net worth.
B. Multiple choice questions
1. Payment or credit history depicts how a person meets debt obligations, which establishes __________________ of a person.
(a) personal history
(b) creditworthiness or the financial character
(c) Non-financial character
(d) None of the above
2. A high credit score provides ______________________. (a) low creditworthiness
(b) high creditworthiness
(c) moderate creditworthiness
(d) None of the above
3. __________________ is the borrower’s net worth. (a) Drawings
(b) Capital
(c) Risk
(d) None of the above
4. Creditworthiness of customers can also be determined by studying and analysing _______________ of business. (a) income statement and balance sheet
(b) income statement only
(c) balance sheet only
(d) None of the above
5. ___________________ measure the creditworthiness of the customers.
(a) Credit reporting agencies
(b) Agencies
Sales Associate – Class XI
(c) Marketers
(d) None of the above
C. State whether the following are True or False 1. Payment or credit history depicts how a person meets debt obligations.
2. Creditworthiness is the valuation performed by borrowers. 3. Creditworthiness can be increased by paying bills on time.
D. Match the columns
E. Short answer questions
1. Define creditworthiness.
2. How can credit score be improved?
3. Which are the five Cs of credit?
F. Long answer questions
1. How do you check the creditworthiness of a customer? 2. Explain the techniques used for determining credit worthiness of a customer.
G. Check your performance
1. Make a presentation on checking the creditworthiness of a borrower.
2. Demonstrate the knowledge of the techniques used for determining the creditworthiness of customers.
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Process of Credit Application
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