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CREDIT, NATURE OF CREDIT AND COLLECTION - Coggle Diagram

- - - - understand what a lender might see when evaluating your application.
      - start by pulling your credit report.
    - - Avoid opening any new accounts or cards until after your loan is funded
      - Increase your savings balances
      - Reduce your debts where possible
      - Request a credit limit increase on your existing cards (but don’t use it)
      - Pay your bills on time, month after month (automate your payments if necessary)
- - - - Relationship of Credit Department and Credit Policy
        
        the credit policy may need
        to be revised to fill the bigger and expanding role of credit in the organization.
        
        the credit department will likely be where the sales contract, personal guarantee, and other initiating
        documents for new clients are located.
        
        Organizing the Credit Department
        
        The requirements of the business determine the size and type of credit department
        
        How a Credit Department is Organized
        
        Types of Credit Organization
        
        Management Responsibilities
        
        Business Organization
        
        Centralization and Decentralization
        
        Centralized Structure
        
        The credit function is controlled and administered from a principal or central location.
        
        Decentralized Structure
        
        The credit function may be reporting to a principal location with credit personnel located at remote
        offices.
        
        Types of Credit Organization
        
        Decentralized
        
        Credit Controlled at Headquarters but Administered from Decentralized Locations
        
        Decentralized
        
        Credit Controlled and Administered from Decentralized Locations with a Staff Office at
        Headquarters
        
        Centralized
        
        Credit Controlled and Administered at a Headquarters Office
        
        Benefits of Centralization
        
        Fewer checks per customer
        
        Reduction in number of lockboxes
        
        Speed up receipt of payments
        
        Benefits of Decentralization
        
        3 more items...
        
        Centralization and Decentralization
      - The obvious
        few are the reduction of bad debt and the increase of timely payments by new and current customers.
      - the credit department include stream-lined payment and billing processes making it easier for clients to pay and pay timely