Module 4

Question 1

The main function of the credit department is

Answer 1

Credit evaluation

Question 2

Is a form used by potential borrowers to get approval for credit from lenders. The information on the application is used to determine the borrower’s credit history. The information on the applicatiom is used to determine the borrower’s credit history, business/employment status, and ability to repay the loan amount.

Answer 2

Credit application

Question 3

The next step in the credit evaluation process us . This validates the information stated in the credit applicatiom

Answer 3

Credit interview

Question 4

is a government-owned and controlled corporation that is envisioned to be the leading provider of independent, reliable and accurate credit information in the Philippines. CIC was created in 2008 by virtue of Republic Act. No. 9510, otherwise known as the Credit Information System Act (CISA). To collect, collate and disseminate credit information

Answer 4

Credit information corporation (CIC)

Question 5

Is an act establishing the credit information system in the Philippines. The State distinguished the need to build a centralized and comprehensive credit information system for the dissemination and collection of fair and accurate information relevant to, or arising from, credit and credit-related activities of all entities participating in the financial system.

Answer 5

Credit Information System Act of 2008 or CISA LAW (R.A. 9510)

Question 6

Credit review is based on the information of the credit applicant. The assessment of an applicant’s credit standing is based on different sources and types of information. It incorporates the economic and qualitative data concerning the borrower

Answer 6

Credit information

Question 7

One of the core functions of the credit department is. It is a procedure undertaken by a financial institution to examine a potential client’s ability to pay back a loan.

Answer 7

Credit investigation

Question 8

Purpose of credit investigation

Answer 8

-to validate the credit information supplied by the applicant
-to gather additional relevant data
-to collect factual and accurate information that will lead to an appropriate credit decision

Question 9

Scopeof credit investigation

Answer 9

1. Company’s Background/ history
2. Financial Conditions
3. Dealings with Government Lending Agencies, etc.
4. Banks Experience with the subject
5. Court Cases

Question 10

Factors in determining the scope of Credit Investigation

Answer 10

1. Purposes and Types of Investigation
2. Company Credit Policy
3. ClientClassification
4. Amountinvolved. 5.TimeandresourceConstraints.

Question 11

Types of credit investigation

Answer 11

1. Direct investigation
2. Indirect investigation

Question 12

occurs when the creditor collects credit information either through direct contact with the customer or through direct contact with non- commercial sources of information such as competitors, banks and other trade references that may have relevant details to share.

Answer 12

Direct investigation

Question 13

usually refers to acquiring information from third-party sources that are in the business of preparing information on businesses/companies. These third-party sources are referred to as commercial credit agencies, bureaus or “repositories.”

Answer 13

Indirect investigation

Question 14

Qualities and qualifications of credit investigators

Answer 14

1. Education
2. Computer skills
3. Communication Skills
4. Organizational Skills
5. Confidentiality
6. Time management skills
7. Collaboration skills
8. Interpersonal skills

Question 15

Is the evaluatiom of the physical condition of a building, equipment, machinery or any property used as loan collateral

Answer 15

Inspection

Question 16

Is a valuation of property, such as real estate, a business, equipment or machinery, by the estimate of an authorized person

Answer 16

Property appraisal

Question 17

Appraisal determines the value of the property in terms of:

Answer 17

1. Market Value
2. Insurable Value
3. Going Concern Value
4. Liquidation Value/Price
5. Assessed Value

Question 18

the ability to communicate effectively both orally and in writing, and must be able to communicate with diverse groups and populations

Answer 18

Communication skills

Question 19

must be discreet with their clients’ private credit information

Answer 19

Confidentiality

Question 20

Bachelor’s degree in Finance, Accounting, Business Administration, or
a related field

Answer 20

Education

Question 21

the ability to effectively prioritize tasks and manage multiple
assignments

Answer 21

Organizational skills

Question 22

the ability to meet deadlines and manage relationship
manager and client expectations

Answer 22

Time and Management skills

Question 23

skills for relationship building and establishing rapport

Answer 23

Interpersonal skills

Question 24

must be able to work in a team-oriented environment

Answer 24

Collaboration skills

Question 25

highest price estimated which a property will bring if exposed for sale
in the open market; the price under which a willing seller will sell and a willing buyer
will buy

Answer 25

Market value

Question 26

the value of property stated in an insurance contract indicating the
limit of indemnity that will be paid at the time of loss.

Answer 26

insurable value

Question 27

the value of a business that is expected to continue
operating into the future

Answer 27

Going concern value

Question 28

total worth of a company’s physical assets when it goes
out of business or if it were to go out of business; lower than market value

Answer 28

Liquidation value/price

Question 29

value assigned to a property to measure applicable taxes

Answer 29

assessed value