The risk of loss that is caused by the non payment of a loan or other line of credit no matter if it is the main credit or interest (coupon) or both, that a debtor has to pay is called a credit risk.

Risks that lenders face to consumers

Before applying the pertinent strategies the lenders first opt for their own models (Credit Scorecards) in order to arrange both the existing and possible clients. The customers are charged a higher price that covers the higher risks and the other way around; such products are: the personal loans that are not secure or the mortgages. The risk is controlled by the use of the credit cards or overdrafts which are risk controlled. The security some products require is most commonly expressed in the form of property.

Risks that lenders face to business

Depending on the level of risk the loans’ cost/benefit will be exchanged and the interest will be charged although this is not the only way used to countervail for the risk. The lender will be offered some control measures gained after signing the written agreements of the protective covenants which will:

- restrain the ability to purposefully diminish the borrower's balance sheet, such as the purchase of back shares, or paying dividends, or making further borrowing.

- permit the close checking of the debt by requiring audits, and monthly reports

- offer the lender the possibility to have a loan revocation when he/she notices that there is a deterioration of the interest coverage.

Risks that businesses face

The companies face the risk when there’s no demand for a Companies carry credit risk when, for example, there’s no beforehand cash payment for products or services. When the billing is made after the customer was served the company faces a risk during the period the service is offered and the payment is made.