What do you mean by Credit Risk and how will you try to analyse a person’s credit risk?

Question

Accepted Answer

Credit risk refers to the potential for loss due to a borrower's failure to repay a loan or meet their financial obligations.

Credit risk is the risk that a borrower may default on their loan or fail to meet their financial obligations.
To analyze a person's credit risk, various factors are considered such as their credit history, income level, employment stability, and debt-to-income ratio.
Credit risk analysis involves assessing the likelihood of default and determining the appropriate interest rate or credit limit for the borrower.
Credit scores and credit reports are commonly used tools to evaluate credit risk.
For example, a person with a low credit score and a history of late payments may be considered to have a higher credit risk.
Lenders and financial institutions use credit risk analysis to make informed decisions about lending money and managing their loan portfolios.

Top American Express Pget interview questions & answers