What is the content of a Credit Policy?

A credit policy primarily focuses on the guidelines for assessing credit risk. This involves defining the criteria that a lender or business uses to evaluate the creditworthiness of a potential borrower or customer. By establishing these guidelines, the policy helps ensure that decisions regarding credit issuance are based on consistent and measurable factors. This includes evaluating financial history, income, and other relevant metrics to determine the likelihood of repayment.

Other components, such as regulations on cardholder fees, instructions for merchants on transaction processing, and recommendations for customer service practices, do not directly pertain to the credit policy's core function of risk assessment. Instead, they relate to other areas of payment processing and customer interaction that, while important, are outside the primary focus of credit risk evaluation.