Credit Control

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DEFINITION

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".

INVESTOPEDIA EXPLAINS

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.


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