Granting credit

2.0 PURPOSE 2.1 Credit is a privilege granted to a person or business by another person or business. Credit should never be considered a right. 2.2 Too often, companies feel that they must give credit terms to any, and all customers who want it. Credit is actually a "loan" of money, from one party to another. 2.3 When you wish to borrow money from the bank, you must apply for this loan -- or credit. This is accomplished through a "credit" loan application, and other requested documentation. 2.4 As you "lend" money to others in the form of credit, you too should request and verify credit information. The fundamental purpose of this procedure is to formulate a specific policy of granting credit and revising credit activity through necessary controls.