Credit risk Credit Risk is the probable risk of loss resulting from a borrower's failure to repay a loan or meet contractual obligations. If a company offers credit to its client,then there is a risk that its clients may not pay their invoices.
Types of Credit Risk Good Risk: An investment that one believes is likely to be profitable. The term most often refers to a loan made to a creditworthy person or company. Good risks are considered exceptionally likely to be repaid. Bad Risk: A loan that is unlikely to be repaid because of bad credit history, insufficient income, or some other reason. A bad risk increases the risk to the lender and the likelihood of default on the part of the borrower.
Objective: Based on the attributes, classify a person as good or bad credit risk.