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Understanding Credit Information Sources

Credit information comes from various sources and is used by creditors to evaluate a debtor's ability to repay potential loans. Traditional credit analysis uses the 5C's of credit to determine risk, while other factors like borrowing history are also considered. Credit rating agencies both domestic and international, like the Philippine Rating Services Corporation, provide ratings of companies' financial strength to help them obtain funding. The Credit Management Association of the Philippines is also a source of customer payment information. Internal audits evaluate work culture and compliance, while external audits provide unbiased reviews of a company's operations.

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Kei Senpai
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22 views1 page

Understanding Credit Information Sources

Credit information comes from various sources and is used by creditors to evaluate a debtor's ability to repay potential loans. Traditional credit analysis uses the 5C's of credit to determine risk, while other factors like borrowing history are also considered. Credit rating agencies both domestic and international, like the Philippine Rating Services Corporation, provide ratings of companies' financial strength to help them obtain funding. The Credit Management Association of the Philippines is also a source of customer payment information. Internal audits evaluate work culture and compliance, while external audits provide unbiased reviews of a company's operations.

Uploaded by

Kei Senpai
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© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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a.

Credit Information: Sources and Code of Ethics


Credit information is any information about the debtor that will be helpful to the
creditor in conducting their investigation to know whether the debtor has the ability to
pay its debt if ever approved and given credit. And there are various sources a credit
investigator could find and secure this credit information like the salesman’s reports,
banks, credit reporting agencies, interchange bureaus, etc.
b. Traditional and Other Bases of Credit
Credit analysis by the creditor is used to determine the risk associated with
making a loan. The traditional credit analysis is governed with the 5C’s of credit and
understanding this help the creditor understand the owner and the business and
determine credit worthiness. Also, there are other factors that lenders need consider
when evaluating an individual or business that is seeking credit like the debotr’s credit
worthiness, frequency of borrowing, length of of commitment etc.
c. Credit Rating System: Credit Rating Agencies (Domestic and International) ;
Credit Management Association of the Philippines (CMAP)
Credit rating is an opinion that provides a measure of credit quality that is done
by a rating agency to asses the financial strength of companies and government entities
and is typically used to obtain funding from the public. Some of the credit rating
agencies in the Philippines are the Philippine Rating Services Corporation and Credit
Rating and Investors Services Philippines, Inc. (CRISP) and the example of
international agencies are the Fitch Ratings and Moody’s Corporation and all of them
follow a process and criteria in order to give the accurate credit rating of a certain
company. We also have the Credit Management Association of the Philippines
(CMAP)which is a source of information regarding the manner in which a customer
meets his trade obligations. The association provides the most economical means of
obtaining the ledger experience of other suppliers and often eliminates the need for
other more expensive methods of investigating the customer's trade payment habits.
d. Internal and External Audit
The internal audit report serves as the material that can discuss and reflect the work
culture within an organization and help them identify whether they are doing and
following the things specified in their regulations or if they are truly trying to bridge the
gap between the current condition of the business and the state of operations that they
would like to achieve. Meanwhile, external audits are usually preferred if a company
wants to ensure that the audit results or findings are not biased or does not lean
towards the interests of a specific department or individual within the organization.

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