Credit granting is the process by which a client receives a loan and a certain amount of money is credited to his bank account. To successfully carry out this process, financial institutions must maintain data and documents on their clients in order to assess their ability to meet commitments and reduce past-due portfolio risks.
In this article, we will walk you through a step-by-step process for making informed decisions when granting credit.

Loan application

The process begins when the borrower submits a formal application to one or more credit grantors. In general, the application will include information such as your name, address, and contact information, as well as information about your income and assets, as well as details about the loan’s purpose.

If the applicant has little or no credit history, they may be required to provide additional documentation.

Credit evaluation

Credit grantors use this stage to determine whether a debtor will be able to repay their loan. To accomplish this, the applicant’s assets and liabilities, as well as its financial history and prospects for financial performance, are examined using methods such as scoring and rating.

Credit evaluation is a process that requires quality data and processing time, but it is critical: if the creditor bases its decisions on solid information, it is more likely to be able to distinguish between customers who pay on time and those who do not.

This is especially important for financial institutions that lend to small and medium-sized businesses. According to Banxico data, the delinquency rate of credit to SMEs in Mexico has increased in recent years, surpassing consumer credit in proportion in 2021. Large corporations, on the other hand, have a much lower delinquency rate.

Approval or denial

Once the credit evaluation is completed, the financial institution can decide whether to approve or deny the credit based on the results of its analysis.

If the resolution is favorable, an offer will be made based on the debtor’s ability to pay. It will be up to the borrower to accept or reject this offer, which will be determined by the terms and conditions of the agreement, as well as the interest rate, among other things.

Otherwise, if the credit evaluation indicates a high risk of default, the grantor can reject the request and protect its interests.

CRiskCo API: the solution for quick and secure credit approval

Is your company reliant on accurate credit risk assessments? If this is the case, the Criskco API can assist you in achieving a more secure granting process and mitigating the risks associated with granting a loan to a company or individual that does not have the capacity to fulfill its commitments.

You can generate credit evaluations in minutes using our technology, which incorporates artificial intelligence and real-time access to any leading accounting system’s data, to make credit decisions more efficiently. Furthermore, all information is kept up to date and can be reproduced in reports that are simple to read and understand.

Learn more about the Criskco API and how to read customers better. As a result, you will be able to identify prospects who have the best credit profiles.