CONTENTS
PART ONE BACKGROUND TO THE FIELD OF CREDITS AND COLLECTIONS = 1
CHAPTER 1 Credit in the Economy = 3
What Credit Is = 4
Classification of Credit = 10
Interrelationship between Public, Business, and Consumer Credit = 15
The Role of Credit in Our Economy = 16
The Changing Role of Credit and the Need for Education = 21
Discussion Questions = 22
Suggested Readings = 23
PART TWO UNDERSTANDING CONSUMER CREDIT = 25
CHAPTER 2 Types of Consumer Credit-Retail and Service = 27
Factors Affecting a Decision to Sell on Credit = 28
Retail Option-Terms Revolving Credit = 31
Retail Installment Credit = 38
Principles of Retail Installment Credit = 39
Benefits and Pitfalls of Installment Credit = 48
Retail Charge Account Credit = 49
Service Credit = 50
Discussion Questions = 51
CHAPTER 3 Financing Retail and Service Credit Transactions = 55
Financing Retail and Service Credit Plans = 55
Financing Retail Installment Transactions = 69
The Holder in Due Course Doctrine = 79
Discussion Questions = 80
Suggested Readings = 81
CHAPTER 4 Types of Consumer Credit-Cash Loan Credit = 85
Use of Cash Loans by Consumers = 86
Consumer Cash-Lending Institutions = 87
Relative Costs of Consumer Lending Institutions = 108
Discussion Questions = 111
Suggested Readings = 112
CHAPTER 5 Real Estate Credit = 115
Residential Financing = 118
How Consumers May Finance a Home = 122
Competition among Lenders for Loanable Funds = 128
Provisions of Home Mortgages = 129
Home Equity Loans = 133
Discrimination in Mortgage Lending = 134
Discussion Questions = 135
Suggested Readings = 135
CHAPTER 6 Regulation of Consumer Credit = 139
Federal Regulation of Consumer Credit = 139
State Regulation of Consumer Credit = 158
Discussion Questions = 162
Suggested Readings = 163
PART THREE MANAGEMENT AND ANALYSIS OF CONSUMER CREDIT = 165
CHAPTER 7 Management of Consumer Credit = 167
Retail Credit Management = 168
Service Credit Management = 174
Management of Consumer Credit Activities in Commercial Banks = 174
Organizations of Managers of Financial Institutions = 177
Organization of Managers of Retail Credit Bureaus = 178
Organization of Managers of Collection Services = 178
The Credit Research Center = 179
Managing Promotion in Credit Operations = 179
Discussion Questions = 191
CHAPTER 8 Basis of the Credit Decision = 193
Facts or Opinions = 194
What to Investigate = 194
Credit Qualities to Investigate = 197
Influence of Economic Conditions = 201
Investigation and Verification = 202
How Much to Investigate = 202
Where to Investigate = 203
Information Supplied by Applicants = 203
Information Supplied by Direct Inquiry = 212
Information Supplied from In-file Ledger Facts = 216
Discussion Questions = 216
CHAPTER 9 Basis of the Credit Decision (continued) = 219
History and Organization of Credit Bureaus = 220
Operation of Credit Bureaus = 223
Credit Bureau Operations and the Low = 231
Automated Credit Bureau Reporting = 235
TRW Information Systems and Services = 236
Trans Union = 241
Equifax Inc. = 243
Specialized Credit Bureaus and Other Sources = 244
Discussion Questions = 245
CHAPTER 10 Decision Making, Limit Setting, and Transaction Handling = 247
Decisions-The Essence of Credit Work = 248
Credit Is Relative = 249
Grading as an Analytical Device = 250
Credit Scoring Plans = 256
Discrimination in Decision Making = 259
Setting the Credit Limits after the Decision = 259
Handling the Transaction = 261
Discussion Questions = 270
Credit Report Problems = 270
Suggested Readings = 274
CHAPTER 11 Consumer Collection Policies and Practices = 275
Consumer Credit Insurance = 276
Consumer Credit Counseling Service = 278
Developing a Collection Policy = 279
A General Collection System = 285
Problems with Consumer Bankruptcy = 295
Automated Collections = 297
Impact of a Sound Collection Policy = 299
Discussion Questions = 300
Suggested Readings = 301
PART FOUR BUSINESS CREDIT = 303
CHAPTER 12 Business Use of Commercial Credit = 305
Function of Commercial Credit = 305
Terms of Sale = 308
Terms of Sale Classified = 316
Cash Discounts and Equivalent Rates of Interest = 319
The Problem of Unearned Discounts = 319
Terms of Sale and Federal Legislation = 320
Cash Discounts or Trade Discounts? = 321
Discussion Questions = 322
CHAPTER 13 Business Use of Cash (Financial) Credit = 323
Commercial Credit Management versus Cash Credit Management = 323
Commercial Bank Loans = 325
Activities of the Small Business Administration (SBA) = 329
Accounts Receivable Financing = 331
Commercial Paper as a Source of Funds = 337
Long-Term Loans = 337
Discussion Questions = 339
Suggested Readings = 339
PART FIVE MANAGEMENT AND ANALYSIS OF COMMERCIAL CREDIT = 341
CHAPTER 14 Responsibilities of the Commercial Credit Manager = 343
Commercial Credit Executive-Status, Place, and Functions = 344
Need for Credit Information = 351
Infernal Information and Direct Investigation = 355
Commercial Credit Managers' Problems with Leveraged Buyouts = 359
Discussion Questions = 360
Suggested Readings = 361
CHAPTER 15 Basis of the Commercial Credit Decision-Dun & Bradstreet Business Credit Services = 363
The General Mercantile Agency = 364
The Organization, Services, and Activities of Dun & Bradstreet Business Credit Services Today = 365
Principal Types of Reports = 373
The Dun & Bradstreet Reference Book = 382
Other Activities = 386
Evaluation of Dun & Bradstreet = 386
Discussion Questions = 387
CHAPTER 16 Basis of Commercial Credit Decision Other Commercial Credit Reporting Agencies = 389
National Association of Credit Management = 389
Business Credit Reporting Service (NACM) = 391
Contents and Interpretation of a National Business Credit Report = 393
Appraisal of the NACM Credit System = 395
Business Credit Division of TRW = 396
Specialized Mercantile Agencies = 397
Dun & Bradstreet's Interest in Specialized Credit Reporting = 397
Other Specialized Commercial Credit Reporting Agencies = 401
Discussion Questions = 403
CHAPTER 17 Financial Statements-Analysis and Interpretation = 405
Reasons for Financial Statements = 406
Sources of Statements = 408
Types of Accounting Opinions on Financial Statements = 411
Purposes of Statement Analysis = 412
Importance of Cash Flow = 415
Preliminary Appraisal of Financial Statements = 416
Financial Statement Legislation = 422
Methods of Statement Analysis = 423
Discussion Questions = 424
Suggested Readings = 424
CHAPTER 18 Financial Statements-Analysis and Interpretation (continued) = 427
Methods of Statement Analysis = 428
Use of Standards in Statement Analysis = 436
Limitation of Statement Analysis = 436
Illustrative Use of Ratio Analysis = 437
Conclusions of Statement Analysis = 439
Discussion Questions = 439
Suggested Readings = 442
CHAPTER 19 Commercial Credit-Analysis, Decision Making, and Credit Lines = 443
Core of the Commercial Credit Task = 443
Credit Lines = 447
Automation in the Commercial Credit Department = 452
Review of Decisions = 457
Discussion Questions = 458
Suggested Readings = 458
CHAPTER 20 Collection Policies and Practices in Commercial Credit = 461
Factors Affecting Collection Policy = 462
Preliminary Steps in Establishing a Commercial Collection System = 467
Collection Practices Available = 468
Commercial Credit Insurance = 469
Single Creditor and Single Debtor = 474
Group of Creditors and Single Debtor = 475
Third-Party Actions = 481
Better Collections-Is There a Solution? = 483
Discussion Questions = 484
Suggested Readings = 485
PART SIX INTERNATIONAL TRADE CREDIT = 487
CHAPTER 21 International Trade Credit = 489
Credit Problems of Export Trade = 491
Export Terms of Sale = 497
Sources of Foreign Credit Information = 501
Discussion Questions = 504
Suggested Readings = 504
PART SEVEN CONTROL OF CREDIT OPERATORS = 507
CHAPTER 22 Measuring Efficiency and Control of Credit Decisions = 509
Responsibility of the Credit Department = 510
Tests of Credit Department Operations = 511
Adaptation of New Management Tools to Testing Credit Operations = 519
Presenting the Measured Results = 520
Discussion Questions = 521
GLOSSARY OF TERMS = 523
INDEX = 529
