Credit evaluation is the activity of banks to evaluate the credit status of borrowers. The most basic condition for bank loans is credit. With good credit, it is easy to get bank loan support, and with poor credit, it is difficult to get bank loan support.
The borrower's credit is composed of many factors, including the borrower's assets and liabilities, management level, product economic benefits and market development trends. In order to have a unified, basic and correct evaluation of the borrower's credit status and master the bank loan correctly, it is necessary to evaluate the borrower's credit status.
There are two main methods of credit evaluation: ① banking institutions evaluate the borrower's own credit status; (2) Entrust a special evaluation agency to evaluate the borrower's credit status. The former is organized by itself according to the needs of bank loan management, and the latter must be entrusted by the parties. Without the entrustment of the parties, credit evaluation agencies generally do not evaluate the credit status of borrowers.
The evaluation generally adopts a hierarchical system. In China, it is usually divided into three grades: A, B, C or A, B, C and D, and each grade can be divided into different grades. For example, Shanghai Far East Credit Rating Company divides A, B and C into AAA, AA and A; BBB、BB、B；
CCC, CC and C are nine grades. You can also divide grades into positive and negative symbols and so on. Banks formulate different loan policies and loan conditions according to different credit ratings, which is conducive to strengthening loan management.