Credit Control is a lending method used by banks and financial institutions to provide money to customers and maintain the level of loans of an economy at an optimum level.
Customers with a strong credit report indicate a proven track record of debt repayment which can allow lenders to reduce the risk of default when granting a new line of credit to a customer.
This lending method can assist banks and other financial organizations to identify problematic consumers with poor credit histories and ensure the clients with a good credit history are provided a line of credit.
This method guarantees that only prospective clients with a decent credit history and a track record of making debt repayments are selected. This will make sure that the company has sufficient cash flow and liquidity to continue operations.
It is the government’s responsibility to maintain the optimal level of loans in the economy. As a representative of the government, the central bank does this job of credit control.
Use of this Term in Sentences
- Credit control is also known as lender control management.
- Credit control is a business technique that promotes the sale of goods or services to clients by giving credit to them.
- Credit control is concerned with the following issues: the credit period, discounts, credit standards, and the collection policy.