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Credit Rating

Credit rating - A comprehensive assessment of the risk for individual loans

The credit rating plays a central role in assessing the risks of individual loans. It is a significant factor that is of great importance to both borrowers and investors. The rating provides information on how high the risk of a credit default is and is based on a thorough analysis of various relevant factors.

A crucial aspect in determining the credit rating is the default risk. This is calculated based on a careful consideration of a variety of internal and external factors. Internal factors may include the borrower's financial situation and credit history, as well as their ability to pay and creditworthiness. External factors could include macroeconomic conditions, industry trends, and general economic conditions. The combination of these factors allows for an accurate assessment of risk.

Another important aspect that goes into the credit rating is the term of the loan. The term has a direct impact on the risk for the investor. Longer terms tend to have a higher risk because economic conditions and financial situations can change over time. Therefore, both the term and the probability of default are considered when evaluating a loan project.

It is important to note that the credit rating can vary from platform to platform. Each crowdlending platform has its own criteria and methods for calculating ratings, which makes a direct comparison difficult. Investors should therefore carefully research the platforms' rating methods and take them into account when making investment decisions.

On the Crowd4Cash platform, credit ratings are given in the form of scores to enable investors to make a simple and quick assessment. This enables investors to better understand the risks and opportunities of different credit projects and make informed decisions.

Overall, credit ratings play a crucial role in creating trust and transparency on crowdlending platforms. They provide valuable information that is of great importance for both borrowers and investors to make informed decisions and successfully participate in the Crowd4Cash platform.