Credit Risk Policy

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Screenshot of the first page of Credit Risk Policy
By
Jenifer Guskay

This policy outlines a set of procedures governing credit risk for a company. It also formalizes the company credit risk management process, the goal of which is to: protect against any unwarranted customer or counterparty credit exposures; maintain credit risk at a manageable level; and identify and avoid a material credit failure (of a significant value).

This sample communicates the tolerance of the company board and management for credit exposure and sets forth the acceptable techniques for avoiding, mitigating, or effectively managing credit exposure. It also contains guiding principles to provide a framework for decision-making consistent with the company’s overall risk management objectives.

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