Businesses often use various tools and techniques to facilitate credit analysis, such as:
- Credit Rating Agencies: Agencies like Moody’s, Standard & Poor’s, and Fitch provide credit ratings that help assess the creditworthiness of borrowers. - Financial Ratios: Ratios like the current ratio, debt-to-equity ratio, and interest coverage ratio provide insights into the borrower’s financial stability. - Credit Scoring Models: Models like FICO scores are used to evaluate the credit risk of individuals and businesses. - Software Solutions: Advanced software tools and platforms streamline the credit analysis process, offering real-time data and predictive analytics.