Credit Standards

Credit Standards

The guidelines a company follows to determine whether a credit applicant is creditworthy.

Credit Standards

The set of standards that a company or bank uses to determine whether to extend a loan or line of credit to an applicant. Credit standards may include having a certain FICO score, recent good credit history, and a certain income.
References in periodicals archive ?
It said, 'Despite ongoing demand growth, survey results suggest a reduced willingness to extend business loans among financial institutions, with changes in credit standards suggesting a higher degree of risk aversion.
Conducted in August 2015, the survey asked senior mortgage executives whether their lending organization's credit standards have eased, tightened, or remained essentially unchanged for GSE eligible, non-GSE eligible, and government loans during the prior three months.
However, overall credit conditions appear to have softened from previous quarters, with moderating demand growth for credit and a tightening of credit standards for corporates.
The quarterly credit sentiment survey of lenders by the UAE Central Bank in the fourth quarter of 2014 had hinted at a potential slow down in credit demand and tightening of credit standards at the aggregate level.
The survey indicated a marginal tightening in credit standards vis-a-vis maximum loan-to value (LTV).
The third-quarter survey found most lenders reported no major changes in their credit standards for the prior three months.
Tightening of credit standards on loans to enterprises stabilised in the third quarter, while demand for loans by households and enterprises was lower compared with the previous quarter, the Central Bank of Cyprus said in its October Banking Lending Survey (BLS).
Two ad hoc questions were included in the questionnaire for the October 2013 survey, namely one addressing the impact of the financial market situation on access to retail and wholesale funding and one on the impact of the sovereign debt market tensions on banks funding conditions, credit standards and credit margins.
In the third quarter, the net percentage of bank reporting a tightening of credit standards for housing loans to households fell to 3.
Credit standards and terms have not witnessed notable changes in Q2/2010.
The survey involves putting a number of questions to a representative sample of the euro zone's banks regarding their lending activities: credit standards for approving loans; credit terms and conditions; and credit demand and the factors affecting it.
Having witnessed the unprecedentedly adverse consequences of the crisis, lenders reversed the practice of making highly risky mortgage loans and now require that credit standards be followed more strictly.