Assessing creditworthiness comes with its set of challenges, including:
1. Incomplete Information Sometimes, customers may not provide complete financial information, making it difficult to accurately assess their creditworthiness. Businesses need to rely on external sources and credit agencies for additional data.
2. Dynamic Market Conditions Market conditions can change rapidly, affecting a customer’s financial health. Continuous monitoring and periodic re-evaluation are essential to stay updated on any significant changes.
3. Subjectivity in Assessment While quantitative data is crucial, qualitative aspects such as market reputation can be subjective. Balancing these two aspects requires experience and judgment.
