# Credit Risk Basics

> Assess and manage customer and counterparty credit risk — limits, terms, collections escalation, and loss awareness. Use when setting credit policies, reviewing large customer exposure, or reducing bad-debt risk.

- Skill: `itsual/credit-risk-basics` (Agent Skill)
- Install (CLI): `npx skillmds@latest add itsual/credit-risk-basics`
- Raw SKILL.md: https://api.skillmd.com/api/skills/itsual/credit-risk-basics/raw
- Safety review: pending (external: skill-scanner PASS, skillspector PASS)
- Works with: Claude Code, Claude.ai, OpenAI Codex
- Category: Coding & Dev Tools
- Author: itsual (https://skillmd.com/u/itsual)
- Updated: 2026-09-22
- Page: https://skillmd.com/skills/itsual/credit-risk-basics

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# Credit Risk Basics

## Overview

Credit risk is the chance a customer or counterparty won’t pay. Managing it balances growth with the cost of bad debt and cash delays.

## When to Use

- Credit policy design
- Large deal credit approval
- AR risk segmentation
- Reseller or partner credit exposure

## Core Practices

- Define credit limits and approval authority
- Assess new customers with proportionate diligence
- Monitor concentration in top accounts
- Escalate past-due systematically
- Reserve for expected credit losses appropriately

## Principles

- Revenue to a non-paying customer is not success
- Terms are a pricing and risk tool
- Early warning beats late legal action
- Sales and finance need shared incentives on collectible revenue

## Verification

- [ ] Credit policy is documented and applied
- [ ] Large exposures are visible
- [ ] Collections escalation path is clear