Credit

• Credit


  In the context of credit management, refers to the extension of the ability to borrow money or obtain goods and services with the understanding that payment will be made at a later date

  
• Credit Management Process

  
  

  2. Credit Analysis

  3. Credit Monitoring

  4. Debt Collection

  5. Legal Action

  1.

  
• 
  

  • Includes basic information about the company, information about the company's owners, financial information, and references
• Credit Analysis

  Reviewing the customer's credit history, income, and other financial information to determine their ability to pay

  
• Credit Monitoring

  Tracking the customer's payments, sending out reminders for overdue payments, and following up with the customer if necessary

  
• 
  

  Sending out collection letters, making phone calls, and negotiating payment plans with the customer
• Legal Action


  Filing a lawsuit, obtaining a judgment against the customer, and garnishing bank accounts
• Reporting


  Keeping accurate records of all credit transactions and debt collection activities, and generating reports to analyze the effectiveness of the credit management process

  
• Late payment and payment default situations happen with alarming frequency, and it's critical to the financial health of your company to minimize them</b>
• Many businesses find it challenging to properly evaluate and track the creditworthiness of new customers, and when conducting business with foreign customers, customer risk management becomes even more complex
• Responsibilities and traits of effective credit managers


  • Conducting credit checks on new and potential customers
  • Implementing collection policies and regulations
  • Helping accounts receivable (AR) colleagues (especially collections staff) manage days sales outstanding (DSO)

  
• Credit evaluation

  The process of assessing the creditworthiness of a potential borrower

  
• Credit evaluation process


  1. Review of borrower's financial history

  2. Review of borrower's current financial situation
• Credit evaluation


  • Includes review of borrower's sources of income, outstanding debts, and recent credit activity
• Credit report


  Important document that provides a snapshot of your credit history

  
• Parts of a credit report

  • Credit history
  • Creditworthiness
  • Credit activity
• Credit history

  Information in credit report about past credit experiences, including amounts borrowed, loan terms, and payments made
• Creditworthiness


  Based on credit history and information in credit report, including debt-to-income ratio, amount of credit available, and type of credit used
• Credit activity

  Information in credit report about times when credit or money was borrowed, including dates, amounts, and types of products/services

  
• Factors affecting credit evaluation

  • Credit history
  • Spending habits
  • Debt-to-income ratio
  • Credit score
• Credit history


  Most important factor in credit evaluation, includes payment history on credit cards, loans, and other debts
• Spending habits

  Important factor in credit evaluation, lenders look at spending on housing, cars, utilities, and other expenses
• Debt-to-income ratio


  Important factor in credit evaluation, shows how much debt can be paid back compared to income
• Credit score


  Numerical measure of creditworthiness, a high score means lenders are less likely to reject loan/credit applications

  
• Benefits of good credit evaluation


  • Better rates on loans, mortgages, and other financial products
  • Better credit terms in the future
  • Improved chances of getting approved for a job or promotion
  • Staying out of debt and improving financial stability
• Specific benefits of good credit evaluation


  • Better interest rates on loans and mortgages
  • Better interest rates on car loans, credit cards, and other loans
  • Less likely to be rejected for a job
  • Avoiding higher interest rates on loans and financial products due to poor credit
• How to improve credit score

  1. Ensure credit report is accurate

  2. Pay bills on time

  3. Keep good credit history

  4. Use credit counseling/optimization service

  5. Keep credit utilization low

  6. Avoid using old/closed accounts

  7. Get secured credit card

  8. Consider personal loan

  9. Work with financial planner

  10. Check credit score regularly
• Common misconceptions about credit evaluation


  • Credit evaluations only used by lenders
  • Evaluation only determines loan approval
  • Evaluation based solely on credit history
  • Good credit history required for good interest rate
  • Poor credit history means no loan approval
  • Credit score most important factor
  • Credit score not always accurate
  • No credit history means credit score doesn't matter
  • Credit score affected only by credit history
  • All lenders use same evaluation criteria
  • Credit score can never be improved
  • Credit score can only go down
  • Low score means no loan approval
  • Low score means can't borrow money

  
• This document is a property of NONESCOST
• Unauthorized copying and / or editing is prohibited. (For Classroom Use Only)
• Prepared by: Mary Ann T. Arceno, Ph. D, Andrea Monica R.Barbasa, MILE
• Gender and Development

  The development perspective and process that is participatory and empowering, equitable, sustainable, free from violence, respectful of human rights, supportive of self-determination and actualization of human potentials
• Objectives

  1. Discuss gender and development in the international and local context

  2. State the importance of gender equality in achieving sustainable development

  3. Present creatively how to involve one's self in addressing major concerns of GAD legal mandates
• International legal mandates which prioritize the achievement of gender equality

  • Beijing Platform of Action
  • Millennium Development Goals
  • Sustainable Development Goals
  • Convention on the Elimination of All Forms of Discrimination against Women (CEDAW)
• Important national legal mandates which address gender concerns

  • Republic Act 9710 or The Magna Carta of Women (MCW)
  • Republic Act No. 7192. An Act Promoting the Integration of Women as Full and Equal Partners of Men in Development and Nation Building and For Other Purposes
  • The Philippine Plan for Gender-Responsive Development (1995-2025)
  • Framework Plan for Women, 2001-2004
• Beijing Platform for Action

  • Flagged 12 key areas where urgent action was needed to ensure greater equality and opportunities for women and men, girls and boys
  • Laid out concrete ways for countries to bring about change
• 12 critical areas of concern in the Beijing Platform for Action

  • Poverty
  • Education and Training
  • Health
  • Violence
  • Armed Conflict
  • Economy
  • Decision-making
  • Institutional Mechanisms
  • Human Rights
  • Media
  • Environment
  • The Girl-Child
• The Millennium Development Goals (MDGs) committed nations to a new global partnership to reduce extreme poverty, and set out a series of eight time-bound targets - with a deadline of 2015
• The Sustainable Development Goals (SDGs) are a framework of 17 goals and 169 targets across social, economic and environmental areas of sustainable development, which United Nations (UN) Member States have committed to making a reality over the next 15 years
• The 17 Sustainable Development Goals (SDGs)

  • Goal 1: No Poverty
  • Goal 2: Zero Hunger
  • Goal 3: Good Health and Well-being
  • Goal 4: Quality Education
  • Goal 5: Gender Equality
  • Goal 6: Clean Water and Sanitation
  • Goal 7: Affordable and Clean Energy
  • Goal 8: Decent Work and Economic Growth
  • Goal 9: Industry, Innovation and Infrastructure
  • Goal 10: Reduced Inequality
  • Goal 11: Sustainable Cities and Communities
  • Goal 12: Responsible Consumption and Production
  • Goal 13: Climate Action
  • Goal 14: Life below Water
  • Goal 15: Life on Land
  • Goal 16: Peace and Justice Strong Institutions
  • Goal 17: Partnerships to achieve the Goal