The mortgage crisis of 2007-2009 has highlighted the deficiencies of credit assessment strategies and has outlined the significant need for improvements in credit assessment practices. Traditionally, credit assessment approaches had two fundamental flaws. First, they did not perform an adequate job in assessing risks in the market. Second, lack of clarity in underwriting practices due to lack of proper models have also contributed to the deficiencies of current credit assessment strategies. As the accuracy and validity of credit scores continue to be debated, there is a growing need for new and improved credit assessment practices with technology being an integral component. Simply recalibrating current systems would fail to address this need.

With this in mind, many companies and providers have come up with a comprehensive credit assessment framework to offer a sustainable segmentation based on primary credit components. In other words, this framework plans to:

• Expand the scope of information and knowledge base
• Appropriate classification of loan requests
• Purposing and re-purposing secondary qualification factors
• Incorporate policies that respond to rapid changes in the economic climate
• Integrate a comprehensive classification mechanism based on the borrower’s qualifications
• Incorporate greater control on loan decisions
• Easily identify loan segments that cater to a large proportion of borrowers

Every financial and lending establishment has its own, unique set of rules and regulations in lending capital to borrowers. Depending on the qualification process, a borrower’s application gets approved or rejected. Credit assessment typically works on the premise of the 5 ‘Cs’ of credit – Capacity, Credit, Collateral, Conditions and Character. In addition, credit assessment works in accordance with the following components:

• Reporting from Credit Agencies
• Type of security on offer
• Loan amount in question
• Valuation assessment
• Stability of job and residence
• Information on the location of the security in question
• Socioeconomic, micro and macro economic factors
• Previous credit history and rating

A credit assessment enhances your edge in evaluating financial risks associated with your projects and deliverables. Using credit assessment reports, you can not only spot gaps and risks, but also reduce risk associated with payments and insolvency. You would definitely have an edge over your competitors in the following areas:

• Accurate information on potential customers and initiatives
• Information on risks of potential commercial transactions
• Evaluation and assessment of economic data and various financial indicators
• Comprehensive information gathering on your customers
• Centralization of data into a unique data source
• Making in-depth company and competitor assessments

Credit assessments for your projects are extremely crucial in every phase of the project lifecycle process. The benefits you can derive from a credit assessment report are as follows:

• Efficient coordination between key project stakeholders, project sponsors, and other key parties of the project
• Efficient estimation of revenue and cash flow
•  from conception to deployment
• Efficient management of historical data
• Better adherence to compliances and regulations
• Better business continuity measures

Global-Ability’s credit assessment vertical is always a step ahead of its competitors as far as essential business practices and customer profitability are concerned. Our teams provide solutions to the following questions:

• Whether the prospect comes with sound credentials
• What is the level of risk the customer carries?
• Whether the supply chain meets regulations
• Will the market forces disrupt operations in a major way?