R&D is important for technological and medical advances, but it involves greater risk for companies. Governments offer R&D credits for tax purposes, with the US offering credits for energy, medical, and generic drug development, and a special credit for rare diseases. Other countries also offer R&D credits, with some offering the best credits for small […]
Credit management systems assess risk, determine credit offers, and collect payments. They provide connection to credit scores and create detailed account databases. High security and robust systems are required due to sensitive data and high transaction volume. Both companies and individuals use credit management systems. A credit management system is a system for managing credit […]
Joint credit is when two or more parties share equal responsibility for a debt based on their combined income, assets, and credit history. Joint liability means all parties are obligated to repay the debt, and joint ventures allow companies to share finances without merging. Parties must negotiate changes to joint credit agreements and remain responsible […]
A credit manager tracks accounts, negotiates payments, participates in collections and legal actions, and protects businesses from bad credit situations. They communicate with customers, banks, and credit bureaus, and may specialize in collections or have a wide variety of credit obligations. They also research and verify payment histories to ensure timely payments and maintain relationships […]
The disability tax credit is available to those with severe mental or physical disabilities in the US who are under retirement age and receive disability payments. Eligibility depends on income level, non-taxable benefits, and marital status, and the credit is applied against taxes owed or refunded if larger. The disability must prevent substantial gainful activity […]
Credit risk in derivatives has two types of exposure: current and potential. Current exposure is determined by a contract’s market price while potential exposure can be estimated using probability analytical tests. Credit risk changes as the underlying contract variables change over time. The concave shape of the credit risk curve is due to the opposing […]
When applying for a credit card, the information required depends on credit history. Basic personal information, including name, address, and Social Security number, is required, as well as details about income, debts, and other financial information. It is important to ensure that the application is legitimate and to answer questions truthfully. The information required on […]
A credit card cosigner is responsible for paying off the debts of another person if they fail to make payments. This system allows individuals with poor credit to establish or improve their credit rating, but finding a cosigner can be difficult due to the high risk and liability involved. A credit card cosigner is a […]
It is legally required to sign the back of a credit card, but some people write “see identification” instead. Not signing can break the contract with the credit card company, and some merchants may require ID. Some credit cards now have photos for ID verification, but not all companies use this method. Many people sign […]
Late payments, new accounts, credit inquiries, and bankruptcy can cause your credit score to drop. Maintaining old accounts and using credit responsibly can gradually improve your score. Lenders use your FICO credit score, a number between 300 and 850, as an indication of whether or not you’re likely to pay off your debts. Since your […]
Export credit agencies minimize risk for companies selling products in international markets by providing assistance in securing payment and assuming risks associated with political situations or changes in exchange rates. They can be government entities or private organizations and offer a range of services. Export credit agencies are institutions that work with national companies to […]
A line of credit is a revolving loan that borrowers can draw on at any time, with variable interest rates tied to indices such as the US Prime Rate or LIBOR. Borrowers should consider factors such as interest rate, set-up fees, and term, and review the terms of the contract to see what access options […]
A credit risk analyst studies available information about loans to determine the probability of default and advises on risk-based pricing. They also diversify loans and work with both private and commercial loans. A degree in business, finance, or a similar field is required. A credit risk analyst, also known as a credit risk manager or […]
Vendor credit is a short-term loan where the seller holds the note for the goods they buy. To improve supplier credit, a company should establish a strong financial history, negotiate credit terms, and research all suppliers in a surrounding market. Businesses should always negotiate terms when it comes to vendor credit. Vendor credit – also […]
Denial of credit occurs when a person or business is refused a line of credit due to lack of credit history, bad credit history, or insufficient information. The Equal Credit Opportunity Act requires lenders to respond within 30 days and provide a reason for denial, which cannot be based on discriminatory factors. Denial of credit, […]
Trade credit insurance covers business debts, not consumer debts. The withholding amount is the minimum debt that must be defaulted before coverage begins, and the insurance limit covers debts beyond that amount. This insurance can help companies extend more credit and may include collection services. Trade credit insurance covers debts owed to one business by […]
An earnings credit rate is an interest rate used to determine bank service charges for business accounts. It identifies fees charged for banking services used and offsets them with balances maintained in the account. It encourages customers to maintain larger balances and can be used as a marketing tool. Clients should review monthly account statements […]
A credit officer creates policies for extending credit to a financial institution’s customers, including auto loans, mortgages, and other types of loans. They develop procedures, set guidelines, and work closely with senior bank officials to administer policy. They also have responsibility for approving or denying credit and managing employees. A four-year degree in business or […]
Credit risk insurance covers extended credit risk, such as trade credit or received credit. Trade credit insurance is the most common type and covers potential loss from non-payment for goods delivered. Consumer credit risk insurance ensures repayment of personal loans. Monthly premiums are charged, and there is a limit on the credit that can be […]
Retailers can apply for a credit card merchant account to accept credit card payments. The account comes with fees, including application, monthly service, and transaction fees. Merchants can reduce fees by maintaining good standing and sales volume, and by following security procedures. Retailers can open a credit card merchant account to accept and process credit […]
