What is 'Credit Control'

Credit control is a strategy employed by manufacturers and retailers to promote good credit among the creditworthy and deny it to delinquent borrowers. This will both increase sales and decrease bad debts, thus improving a company's cash flow. Credit control is an important component in the overall profitability of many firms.

Also known as "credit management".

BREAKING DOWN 'Credit Control'

The effectiveness of credit control procedures lies chiefly in the lender's ability to judge the creditworthiness of potential borrowers. This is much more effective than trying to reclaim money from delinquent borrowers.

RELATED TERMS
  1. Delinquent Account

    A credit card balance on which a consumer has failed to make ...
  2. Creditworthiness

    An assessment of the likelihood that a borrower will default ...
  3. Credit Rating

    An assessment of the creditworthiness of a borrower in general ...
  4. Credit Agency

    A for-profit company that collects information about individuals' ...
  5. Credit Limit

    The amount of credit that a financial institution extends to ...
  6. Bad Credit

    A qualification of an individual's credit history that indicates ...
Related Articles
  1. Personal Finance

    How Credit Card Delinquency Works

    The more you understand about delinquency, the better prepared you'll be to handle it.
  2. Taxes

    How Credit Card Delinquency Works

    When you pay less than the minimum monthly payment on your credit cards, you become delinquent.
  3. Personal Finance

    The Basics Of Lines Of Credit

    Lines of credit are potentially useful hybrids of credit cards and normal loans. Learn how a line of credit can help (and hurt) your finances, and how to find the best one to suit your needs. ...
  4. Investing

    Understanding Credit Risk

    Credit risk arises whenever a borrower is expecting to use future cash flows to pay a current debt.
  5. Small Business

    How To Increase Your Appeal To Prospective Lenders

    Making a business eligible for loans/credit cards at the best possible rates requires crafting an excellent credit profile through the smart use of credit.
  6. Investing

    Revolving Credit vs. Line of Credit

    Revolving credit and a line of credit are arrangements made between a lending institution and a business or individual.
  7. Personal Finance

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  8. Investing

    Millennials: Prevent a Bad Credit Score

    Here are five ways to help prevent getting a bad credit score that could affect future loan, credit card or mortgage approvals.
  9. Investing

    5 Ways Bad Credit Screws Up Your Life

    When your credit score slumps, many other things in your life can also start to slide downward. How to recognize the situation and start dealing with it.
  10. Investing

    Understanding Credit

    Credit has three common meanings in the financial world.
RELATED FAQS
  1. Why do high profiting sales mitigate credit risk?

    Learn more about credit risk in loaning to individuals and businesses. Understand how credit risk is determined and the impact ... Read Answer >>
  2. What information do lenders need when I apply for a credit limit increase?

    Increase your credit limit by making sure your current credit is paid on time and by paying the largest amount you can afford ... Read Answer >>
  3. What are the long-term effects of delinquent accounts?

    Find out more about loan delinquency, loan defaults and the long-term consequences of borrowers who are delinquent on their ... Read Answer >>
  4. What's the difference between a credit bureau and a credit rating agency?

    Learn the differences between credit bureaus that report on individuals' creditworthiness and credit rating agencies that ... Read Answer >>
  5. What is the difference between bad credit and no credit?

    The answer to this question will depend on what information (if any) is found on your credit report, such as any bankruptcy ... Read Answer >>
Hot Definitions
  1. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  3. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  4. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  5. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  6. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
Trading Center