CrefoScore – easy to use and efficient early-stage credit risk indicator, providing immediate assessment of credit applicant’s solvency. CrefoScore precisely corresponds to the current probability of default within 12 months. The higher the index, the higher the risk of insolvency of the company. In order to obtain results which are easier to understand and to use, CrefoScore index is classified into risk classes.
CrefoScore is built using the results of extensive CREDITREFORM research. The following insolvency predictive data listed below are included in estimationhttp://www.crefocert.lv/?_lang=en:
*Latvia’s largest payment history database, maintained by CREDITREFORM;
*Structural data of companies;
*Industry default risk indicators;
*Information from VAT Payer’s Register.
For more convenient use of the index, CrefoScore is classified into risk classes. In the first and second risk group companies with excellent sovency indicators are present, which, according to current calculations, are only 1.5% of Latvian companies. On the other hand, 10th risk class basically means the company insolvency and liquidation proceedings.
CrefoCert certificates may be obtained by companies with a CrefoScore index of 100-250 or within 1st-3rd risk class, respectively - the solvency rates are high, and credit risks - low.
CrefoScore automated system and company movement analysis(solvency improvement or worsening) in a certain period of time gives the opportunity to calculate the probability of insolvency for each risk class.
In the result of calculations, it is possible to classify secure credit involved deals from risky deals, therefore CrefoScore is a valuable indicator of credit risk management. According to current estimates, observed default rate for CrefoCert certified companies is only 2,4%.
Observed default rates for risk classes (12 months)
Purchase of CrefoCert
Certificate offer includes: