CreditRisk+

CreditRisk+ is a statistical model used by financial institutions to estimate the likelihood and potential impact of borrowers defaulting on their debts. It analyzes factors like borrower creditworthiness, economic conditions, and industry trends to assess risk levels. By quantifying the probability of defaults, CreditRisk+ helps lenders determine appropriate loan prices, set aside reserves, and manage their overall credit exposure. Essentially, it provides a systematic way to identify and measure credit risk in a portfolio, enabling more informed lending decisions and better financial planning.