Abstract: Credit risk can jeopardize lending and the financial areas of banks and credit unions. In every bank can appear losses occur at every bank; credit risk that is not properly evaluated and managed can lead to excessive loan losses and damaging the financial condition of financial institutions. Properly managing credit risk, along with improving the earnings of the loan portfolio, can prevent excessive financial damage. All lenders must reduce their risk of loan loss. Credit risk management has responsibility to prevent potential loan loss. Borrowers with consistently poor credit reports or excellent credit scores allow lenders to make easier approval and rejection decisions.