Social Value, Basic Practice Principles, and Notable Features of the Credit Evaluation Industry-World Credit Organization

2.2 The social value, basic practice principles and salient features of the credit evaluation industry

2.2.1 The social value of the credit evaluation industry

Philosophically speaking, the development of human society has many similarities with the development of nature, and the industry balance mechanism of market economy is surprisingly similar to the ecological balance of nature. When the natural enemies of a certain animal decrease, it will bring about a chain effect of ecological imbalance. When a certain industry in the market economy is missing or underdeveloped, it will also lead to the imbalance of the market economy. We can look at the world, whether it is our country or other countries, wherever the credit evaluation industry is underdeveloped, there are many liars and the overall social integrity is poor. At present, the overall lack of credit in our country, the phenomenon of failure of keeping promises and benefits of breaking promises is common. The fundamental reason is that we have long-term lack of credit evaluation industry to restrain liars.

Historically, the reason for the emergence of the credit evaluation industry is the prevalence of scammers. The bounden duty of the credit evaluation industry is to fight fraud. There is a famous saying in the credit evaluation industry: it is our creed to make the untrustworthy fearful. Anti-fraud is the social value of the credit evaluation industry. Based on this, the World Credit Organization (WCO) defines the credit evaluation industry as an industry born out of the social needs of anti-fraud, with anti-fraud as its bounden duty, and specializing in credit information collection, credit evaluation and related services.

From the reasons for the emergence of the credit evaluation industry and the value of the credit evaluation industry, we can also see the long-term existence of the credit evaluation industry, because the market economy is [many independent economic entities independently conduct various transactions] The more developed the market economy, the finer the division of labor, the larger the trading area, and the more information asymmetry between trading subjects. As long as there is information asymmetry, there will be dishonest people who profit by engaging in dishonest behaviors such as fabricating the truth. If there is no situation, there will be liars, which requires the existence of the credit evaluation industry.

2.2.2 Basic Practice Principles of Credit Evaluation Industry

Theoretically speaking, there are many practicing principles in the credit evaluation industry, such as: independence, neutrality, objectivity, fairness, openness, impartiality, integrity, conscientiousness, diligence, strictness, rigor, prudence, legality, and reasonableness. Different credit products also have different practice principles. For example, credit services involving individuals should follow the principle of confidentiality, not the principle of openness.

What we are discussing here is the basic practice principle of the credit evaluation industry, no matter what kind of credit product, generally should follow the practice principles.

1. Independence

Credit service, like lawyer service, accountant and surveyor service, is a kind of intermediary service with evaluation and proof nature. It relies on the knowledge, experience, judgment and sense of responsibility of practitioners, so it also needs to follow The principle of independent practice. The principle of independence generally includes the following meanings:

1. Practitioners have the right to make their own decisions independently, unless they violate laws or practice standards, superiors have no right to intervene or force them to change their practice decisions.

2. Practitioners should bear the responsibility for their practice decisions, and should not evade their practice responsibilities on the grounds of implementing the opinions of others or their superiors.

3. In the event of adverse practice consequences, practitioners are obliged to prove that their practice behavior does not violate the requirements of laws and practice standards, that is, they are obliged to prove that they are not at fault.

4. The leader of the credit company has the right to guide, advise, inquire, supervise, and pursue responsibility for the work of his subordinates, but he has no power to make decisions or make professional decisions on his behalf. Of course, if the leader of the credit company finds that the practice decision of his subordinates violates the law or practice standards, he has the right to ask the practitioners to suspend their practice. When the leader of a credit company exercises its right to suspend practice, it is obliged to explain the reasons to the practitioners.

Two, neutral

Neutral means neutral and unbiased. The principle of neutrality generally includes the following meanings:

1. Practitioners should not listen to partial beliefs, and should give relevant parties the right to object, and should listen to the opinions of relevant parties.

2. Practitioners cannot unilaterally emphasize the interests of one party.

3. Practitioners cannot safeguard the illegal interests of clients or meet unreasonable demands of clients.

Third, objective

The principle of objectivity generally includes the following meanings:

1. Look at and analyze a certain matter from the perspective of a bystander rather than a party involved.

2. When analyzing affairs, personal subjective views and value orientations should be discarded.

3. Analyze problems based on the objective laws of affairs, and avoid substituting personal subjective good wishes for objective facts.

4. Analyze and evaluate affairs based on facts and avoid subjective assumptions.

Fourth, justice

The word fair includes the meanings of fairness, fairness, correctness, and justice. The principle of fairness generally includes the following meanings:

1. Practice behavior should strive to be fair, and try to keep relevant records.

2. Practicing behavior should try to avoid injustice, and try to keep relevant records.

3. The practice behavior should be logically fair, or be fair to the greatest extent.

It should be pointed out that the four practice principles of independence, neutrality, objectivity, and impartiality have successive influences. Without the principle of independence, it is difficult to guarantee the principle of neutrality; without the principle of neutrality, it is difficult to guarantee the principle of objectivity; principle, it is difficult to guarantee the principle of fairness.

2.2.3 Notable features of the credit evaluation industry

1. Coexistence and win-win

The "symbiosis and win-win" relationship between credit institutions is the most prominent feature of the credit evaluation industry, and almost no other industry is more prominent than it. The fierce competition of "you lose and I grow", "I win and you lose" and the excessive pursuit of short-term interests among various practitioners in most industries make people ignore or directly deny the "symbiosis and symbiosis" between them. win" relationship. However, in the course of the development of the credit evaluation industry, the "symbiosis and win-win" interdependent relationship between credit institutions has long been recognized by people in the industry.

The root of the interdependent relationship of "coexistence and win-win" is that the main basis for credit institutions to provide services to the society is credit information, but credit information is unlimited and changes with the actual changes of the social economy, whether it is Neither a business nor a small business can guarantee that its information is complete. Faced with a customer's entrustment, the largest credit company cannot guarantee that its own credit information is sufficient, and the smallest credit company may also have credit information that is of great value to the customer. Therefore, in order to provide customers with more objective and More valuable credit reports require sharing of credit information with other credit agencies.

Later, the expansion of the credit rating industry to the commercial debt collection business made credit institutions pay more attention to and maintain this "coexistence and win-win" interdependence relationship. The reason why the credit rating industry is successful in commercial debt collection business is because This kind of mutual unreserved cooperation enables the debtors' debt records to be quickly transmitted to almost every corner of the world, eventually forcing the debtors to fulfill their repayment obligations. The development of credit institutions' collection of commercial accounts has greatly accelerated the sharing of credit information among credit institutions.

The interdependent relationship of "coexistence and win-win" is a remarkable feature of the credit evaluation industry, and it is also one of the reasons for the rapid development of the credit evaluation industry for more than 100 years. It enables credit institutions to share their respective resources to the maximum extent. Accelerated the transmission of credit information, provided customers with valuable credit reports in a timely manner, and greatly increased the intensity of credit threats and credit punishments, realized the social value of the credit evaluation industry, and in turn stimulated social interest in credit products demand.

This "coexistence and win-win" interdependent relationship makes the competition among credit institutions very rational. During the development of the international credit evaluation industry, few credit institutions attack each other or use unfair competition to squeeze The phenomenon of crushing opponents occurs. However, it is worth mentioning that since my country's credit evaluation industry has just started, practitioners are mixed. Some credit institutions have blocked credit information from each other and set up their own barriers, and there have also been some incidents of malicious plagiarism of intellectual property rights in an attempt to crush opponents. However, we are also pleased to find that more and more credit institutions in my country realize the importance of cooperation between credit institutions.

Second, the priority of social public interests

Most industries, especially the service industry, mostly follow the principle of prioritizing the interests of customers, but in the credit evaluation industry, the principle of prioritizing social and public interests should be followed, that is to say, when the interests of customers conflict with social and public interests, Credit institutions and credit practitioners should first safeguard social public interests. The reasons are as follows:

1. This is determined by the value of the credit evaluation industry. As discussed above, the value of the credit evaluation industry is to curb the prevalence of scammers. If the credit evaluation industry engages in things that are detrimental to the public interest, it will become a liar and lose its existence value.

2. The development of credit institutions is based on their credibility. Without credibility, there will be no stable customers to buy their credit products. However, the accumulation and formation of credibility requires long-term and firm safeguarding of social public interests. If a credit institution engages in things that harm the public interest, it will ruin its credibility and lose long-term customers. For example: a customer spends money to buy a credit evaluation report that evaluates himself falsely from a credit agency, then the customer and the organizations affected by it will no longer trust the credit evaluation report issued by the credit agency, or even, This client and the organizations it affects will question the integrity of the entire credit evaluation industry.

3. Credit institutions are most likely to be exposed when they engage in things that harm the public interest. Credit institutions collect and disseminate the dishonesty records of all transaction subjects, and are the supervisors of social public order and good customs. Although a credit institution is a commercial institution, its business has the nature of public affairs. Since the status of credit institutions and other economic entities is equal, the supervision of other economic entities by credit institutions has also evolved into: the supervision of credit institutions by other economic entities. This makes it easier for credit institutions to be exposed once they engage in things that harm the public interest.

4. Credit institutions are most likely to be resisted by customers with a sense of social responsibility when they engage in things that harm the public interest. Consumers of credit products are generally organizations with high management quality, and these organizations often have a high sense of social responsibility. These organizations have high moral expectations for credit institutions. If they find that the credit institutions themselves are dishonest, they will resist or even actively expose the bad behavior of the credit institutions.

5. The principle of giving priority to social and public interests is the embodiment of the practice principles of the credit evaluation industry. The practice principles of the credit evaluation industry are: independence, neutrality, objectivity, and fairness. These practice principles themselves include the principle of prioritizing social and public interests.

The above content is excerpted from "Introduction to ICE8000 Credit Knowledge" (written by Fang Bangjian, free to use, but please indicate the source)