Credit risk

Credit risk: Definition:
In the simplest sense, credit risk is the chance that a borrower will be unable to pay off a debt. Every financial institution that issues any kind of debt will have a method to determine whether the prospective borrower is in a position to repay the debt on time and in full. They will look at things like your credit score, credit history, and the type and size of the debt you wish to take out before deciding whether the profit they will make on the loan is worth the risk of default.

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