Credit risk is

How is credit risk identified?
Credit risk refers to the probability of loss due to a borrower's failure to make payments on any type of debt.
Credit risk management is the practice of mitigating losses by assessing borrowers' credit risk – including payment behavior and affordability..
How is credit risk measured?
Lenders can use a number of tools to help them assess the credit risks posed by individuals and companies.
Chief among them are probability of default, loss given default, and exposure at default.
The higher the risk, the more the borrower is likely to have to pay for a loan if they qualify for one at all..
What are the 3 types of credit risk?
Credit risk is measured by lenders using proprietary risk rating tools, which differ by firm or jurisdiction and are based on whether the debtor is a personal or a business borrower..
What is meant by credit risk?
Credit risk is the possibility of a loss happening due to a borrower's failure to repay a loan or to satisfy contractual obligations.
Traditionally, it can show the chances that a lender may not accept the owed principal and interest.
This ends up in an interruption of cash flows and improved costs for collection..

How is credit risk identified?