Credit risk means the probability of non-payment of the debt (loan) by the borrower to the bank. At the same time, the analysis of credit risk allows you to assess whether the client will be able to repay the amount of borrowed funds or not.
Instructions
Step 1
Analyze the borrower's credit history. Correlate the available data: how many loans he has now in other banks, how he pays them off (on time or not). See if this person is blacklisted by other banks. It is quite reasonable that the decision to issue a loan is made on the basis of an analysis of the credit history of a potential client. Studying this data before deciding on the possibility, as well as the terms of the loan is necessary for the correct analysis of its creditworthiness.
Step 2
Check the data that is indicated in the application form (application) by the client. To do this, call the company where he works (the phone number must be indicated in this document) and find out if he actually works there.
Step 3
Pay attention to the amount of the borrower's income. You can take such information from the application completed by the client. Correlate the personal data of the borrower: how many children he has, the potential client lives in his apartment or rents it, whether the client is paying the mortgage or maybe he has several more outstanding loans. Then calculate how much money he spends on paying off debts in other banks for a month (meaning, if he has this debt) and add to the received amount the amount of money that is needed to provide for his children. Then subtract the resulting value from his salary.
Step 4
Correlate the obtained data. Analyze whether the borrower will be able to pay the loan requested by him. In this case, calculate what is the minimum amount he will have to pay on the proposed loan per month. Then correlate this value with the remaining funds from his salary. In turn, if the second value is greater than the first, then you can assume that your client is creditworthy and does not pose a credit risk to the bank.
