"Credit management is the process of granting credit, setting the terms on which it is granted, recovering this credit when it is due, and ensuring compliance with company credit policy, among other credit related functions."
The management of borrowing, lending, and debt repayment, including credit scores, loans, and credit cards.
Understanding Credit Scores: Learning about credit scores and how they impact creditworthiness is essential before managing debts.
Credit Reports and Their Importance: Knowing how to obtain credit reports and interpreting them is another crucial part of credit management.
Interest Rates and How They Work: Understanding the difference between Annual percentage rate (APR) and interest rates on loans is important for managing debts.
Debt Consolidation: Learning how consolidation loans work and when they are an advisable option is an essential topic when discussing credit and debt management.
Managing Income and Expenses: Learning to create a budget is important for managing income and expenses to avoid getting into debt.
Credit Counseling: Learning about the role of credit counsellors and how they can help in managing debts.
Credit Card Management Skills: Learning how to manage finances with credit cards to avoid getting into debt.
Student Loans: Understanding the terms and conditions of student loans and how to manage repayment schedules is an important aspect of credit management.
Identity Theft: Understanding how to protect personal identity and avoid identity theft is an essential topic for anyone managing debts.
Bankruptcy: Learning about bankruptcy laws and the implications of filing for bankruptcy is an important consideration when managing credit and debts.
Debt Settlement: Understanding how a debt settlement works and its possible implications for credit scores.
Understanding Interest and Penalty Fees: Knowing how interest and penalty fees work is important in managing debts and avoiding high cost.
Building a Good Credit History: Learning how to succeed with credit management is essential in building a good credit history that could positively affect future credit opportunities.
Financial Planning: Learning how to plan finances for the long term and working towards financial independence while managing debts.
Consumer Protection Laws: Understanding the role of consumer protection laws and regulations and how they can offer protection in different credit situations.
Tax Implications: Knowing how to file taxes in the case of debts or when repaying loans can help you avoid potential penalties.
Insurance and Loan Terms: Understanding how various types of insurance and loan terms can impact credit management is important.
Credit Counseling: A financial management service that helps individuals who are facing debt issues. Credit counseling provides debt management plans, budgeting advice, and financial education to help individuals get out of debt.
Debt Settlement: A debt settlement company helps individuals negotiate with their creditors to reduce their outstanding debt. The company negotiates with the creditor for a lump-sum payment that is less than the original balance.
Debt Consolidation Loans: A debt consolidation loan combines multiple debts into one manageable monthly payment. The loan is used to pay off existing debts, and then the individual makes payments on the loan.
Bankruptcy: A legal process that allows a person to discharge or reorganize their debt. Bankruptcy can help individuals get out of debt, but it has a negative impact on credit scores and can have long-term consequences.
Priority Planning: A financial management strategy that involves prioritizing debt repayment. The individual focuses on paying off high-interest debt first or debt with the highest monthly payments.
Credit Score Management: Managing your credit score effectively is critical for getting approved for loans, credit cards, or mortgages. Credit score management involves paying bills on time, monitoring credit reports, and avoiding credit card balances.
Credit Card Balance Transfers: A credit card balance transfer involves moving existing credit card balances to a new card with a lower interest rate. This can help individuals save money on interest charges and pay off their balance faster.
Debt Snowball Method: A debt management strategy that involves paying off the smallest balance first, then moving on to the next smallest balance until all debts are paid off. This method can help individuals gain momentum and stay motivated.
Debt Avalanche Method: A debt management strategy that involves paying off the debt with the highest interest rate first, then moving on to the next highest interest rate until all debts are paid off. This strategy can save individuals money on interest charges over time.
Financial Coaching: A financial coach provides one-on-one guidance and support to help individuals manage their finances effectively. This can involve budgeting, goal setting, and debt management strategies.
"The goal within a bank or company, in controlling credit, is to improve revenues and profit by facilitating sales and reducing financial risks."
"A structured credit policy ensures that the credit team uses a standardized method for managing a customer’s credit risk. This leads to consistent credit decisions and eliminating compliance issues because there is an audit trail."
"A credit manager is a person employed by an organization to manage the credit department and make decisions concerning credit limits, acceptable levels of risk, terms of payment, and enforcement actions with their customers."
"Credit Managers are responsible for: Controlling bad debt exposure and expenses, maintaining strong cash flows through efficient collections, ensuring an adequate Allowance for Doubtful Accounts is kept by the company, monitoring the Accounts Receivable portfolio for trends and warning signs, hiring and firing credit analysts, accounts receivable and collections personnel, enforcing the 'stop list' of supply of goods and services to customers, removing bad debts from the ledger, setting credit limits, setting credit terms beyond those within credit analysts' authority, setting credit rating criteria, setting and ensuring compliance with a corporate credit policy, pursuing legal remedies for non-payers, obtaining security interests where necessary, initiating legal or other recovery actions against customers who are delinquent."
"The efficiency of cash flow is measured using various methods, most common of which is Days Sales Outstanding (DSO)."
"Credit managers tend to fall into one of three groups depending on the specific legal and jurisdictional knowledge required: Commercial Credit Manager, Consumer Credit Managers, Construction Credit Managers."