Journal of Financial and Quantitative Analysis Vol. 2 No. 4 1967
The Optimal Credit Acceptance Policy
Abstract
Most businesses sell on credit. To administer credit, such companies set credit granting, term, and collection policies. This article analyzes one aspect of credit granting policy: the determination of the optimal number of credit applicants that should be accepted by a creditor. The emphasis in the relevant literature traditionally has been on techniques for estimating a credit applicant's probability of default and, to a lesser degree, on the decision to accept an applicant given his estimated probability of default. Cumulatively, these two decisions are crucial to any business selling on credit.
- DOI
- 10.2307/2330083
- Volume
- 2
- Issue
- 4
- Pages
- 399
- Sources
- crossref openalex