Credit evaluation and approval is an important part of the process, in which a bank or financial institute passes the loan to an individual or a business enterprise. To pass loan, it is very necessary to assess the borrower’s ability to take loan from banks and financial institutes. There are following factors considered necessary to the loan approval -

• credit worthiness of the individual.

• size of debt burden.

• size of loan amount.

• frequency to borrow the loan.

• social and community considerations.

There are many references available for collecting credit appliances, trade references and financial balance-sheets to find potential candidates. This information are necessary to be held confidential by the credit agencies. This data can also show the current debts, liabilities and assets of the borrower.

Credit bureaus are there to collect the data of the small businesses and highly earning professionals like -  doctors, automobile dealers, advocates etc. These bureaus collect these information in the computerized format in weighted order. Many credit rating agencies also take participation in the major credit card plans.

Another credit plan is found in the form of the installment plan. When consumer buys something like - furniture or any consumer goods they make a down payment. They also prefer to pay the remaining amount in the form of monthly installments. It can be for long or short period of time.

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