Credit Risk Rating Software – Credit Risk Rating Platform | Credit Risk Systems

The credit risk rating software is for bank and credit unions, a popular tool that is used to monitor.  The credit risk is a standardized risk rating system that is been used to serve lots of purposes. These systems do help to determine the credit approval processes, covenants placed on the borrower, and how the loans should be priced. It can also form the basis for the broader risk management practices- For example, setting the reserve, stress testing the loan portfolio, setting the risk appetites, and strategic planning.

Credit Risk Rating Software

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Credit Risk Rating Software

Credit risk rating software is a comprehensive solution that enables transparent and flexible implementation and operationalization of credit risk rating models.  The goal of the risk rating system should be to assess a borrower’s potential future payment volatility by reviewing several characteristics. When you are assessing the current financial health of the borrower’s business, the global cash flow, debt service coverage, debt to equity, and that of financial statement strength.  In order, for the Loan to value and collateral value for the loan must be observed to consider it.

However, for most community banks and credit unions, internally- developed risk rating systems are been used. These systems typically use a scorecard rating based on the level of risk in Pass and Criticized categories. Some institutions may have one system for all types of loans. Whereas, others may do have different templates for various loan types.

What is a Credit Risk Rating System?

A credit risk rating system is a formal process that a credit union uses to identify and also to assign a credit risk rating. It is been done to each commercial loan in the federally insured credit union’s portfolio. It gives the management the opportunity to access credit quality, identify the problem loans, and so on. It also helps to guide the loan pricing in order to ensure that loans are right for the risk.

Credit Risk Rating Categories

However, banking supervisory agencies do make use of a familiar risk rating scale in identifying the problem of loans.  This is been used for both the retail loan and the commercial loan relationship. An effective credit risk rating system needs granularity in recognizing the degree of its weakness In troubled loan relationships. The rating assigned to these loans is been referred to as adverse credit risk ratings.

Although, these ratings are would not be required by the NCUA. Credit unions should have their ratings that identify the necessary or vital loss such as the following below.

  • The substandard
  • The doubtful.
  • The special mention.
  • The loss.

To add to the rating above the NCUA recognizes a “pass “rating.  A credit union should have enough granularities in its pass ratings to differentiate and quantify the level of its risk. Adverse trends in pass rating with loans moving from the lower risk to higher grades. This is because it may be an early sign of distress that should be immediately addressed by the credit union.

Benefits of Credit Risk Rating Software

The following are the benefits of Credit Risk Rating Software. The lists are given below.

  • It helps to provide early warning reports.
  • It makes use of the latest technology and designs. Also taking advantage to minimize the cost of development of the service.
  • Aids in improving the Return on Capital (ROC) for the banks.
  • Faster and better credit decisions have been made.
  • The automates credit origination, risk rating, credit approval process, risk administration and monitoring functions, and also the management of Non-Performing assets.

These are the benefits of Credit Risk Rating Software.

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Types of Credit Risk

For you to have a clearer view of the credit risk rating and also to know what you are going in for. It is very important for you to know the types of credit risk. I will be listing them and give you a brief note on them as well.

Credit Default Risk

The credit default risk is of loss which arises from the debtor being unable to pay back the money in full. The debtor is been more than 90 days past is due. Once it is more than 90 days of the date the credit payment will give it rise to the credit default risk.

Concentration Risk

The concentration risk is associated with the exposure of any single or group with the potentials. In order to, produce large losses to threaten the core operations of the banks.  Sometimes it may rise in the single form of the single name concentration even industry concentration.

Country Risk

The country risk rises from the sovereign state when it freezes the payments for foreign currency overnight defaults. It is exclusively associated with the performance of macroeconomics of a country. Its also closely related to the political stability in the country and sudden instability.

Where Can I Get the Credit Risk Rating Software?

The credit risk rating software can be found on the ACTICO platform and the URL to access that is The ACTICO platform is a very powerful software for the in Telligent automation. It combines business rules machines learning with the automation technology to make day-to-day decisions faster and smarter. This platform enables companies to master decision-making processes in the digital world.

The Credit risk management platform is a large and scalable software solution for risk management. It is a platform that is been used by banks, financial service providers, and corporations for assessing and managing credit risks. The features of this platform include capturing and spreading financial statements. Also for a flexible framework for the implementation of the internal rating and scoring models.






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