CCP Cheat Sheet 2026

The 30 highest-yield CCP facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Accounts receivable factoring transfers credit risk to the factor in which arrangement? → Non-recourse factoring
2. A consumer submits a written dispute within 30 days of receiving an initial validation notice. What must the collector do? → Cease collection activity until verification is provided
3. A creditor considering outsourcing to a third-party collection agency must ensure the agency complies with which oversight requirement under the CFPB framework? → The creditor remains responsible for the agency's UDAAP compliance as a service provider
4. What is the primary ethical obligation of a CCP professional when a conflict of interest arises during ratio analysis & cash flow activities? → Disclose the conflict to all relevant parties and recuse from the decision if necessary
5. Which internal control best prevents unauthorized credit limit increases that expose a company to unacceptable risk? → Requiring dual authorization (credit manager + CFO) for limits above a defined threshold
6. Terms of 'net 60 MOM' mean the invoice is due: → 60 days from end of the month of invoice
7. What does 'best possible DSO' (BPDSO) measure? → The DSO achievable if all current receivables were collected immediately
8. A usance or deferred payment letter of credit benefits the importer by: → Granting the buyer a period of credit before payment is due
9. What role does management play in credit policy? → Management sets the policy and ensures its alignment with company goals.
10. A 'settlement in full' offer typically requires the debtor to pay what percentage of the outstanding balance? → A negotiated lump sum, often 40-60% of the balance depending on account age
11. What is the importance of credit policy compliance? → It ensures all credit decisions are fair and within regulatory standards.
12. Which credit risk concept describes the potential loss a lender faces if a borrower defaults, taking into account collateral recovery? → Loss Given Default (LGD)
13. A credit professional is asked to approve terms for a customer whose financial statements show negative tangible net worth. This means: → Intangible assets and goodwill exceed equity, leaving no hard asset cushion for creditors
14. A 'cramdown' in Chapter 11 proceedings allows the court to: → Confirm a reorganization plan over the objection of a dissenting class of creditors
15. Under UCC Article 9, what is the 'automatic perfection' rule that applies to certain purchase money security interests? → A PMSI in consumer goods is perfected automatically upon attachment without filing
16. Which quality assurance method is most commonly applied in ratio analysis & cash flow to verify that CCP professional standards are being met? → Structured audits, peer reviews, and performance metrics aligned with industry benchmarks
17. A credit professional calculates a buyer's interest coverage ratio at 1.2×. What does this indicate? → The buyer has very thin coverage, with operating income barely exceeding interest charges
18. What is the primary ethical obligation of a CCP professional when a conflict of interest arises during trade credit terms & dso activities? → Disclose the conflict to all relevant parties and recuse from the decision if necessary
19. A lender is evaluating a leveraged buyout (LBO) transaction. Which ratio is MOST important for assessing the sustainability of the debt load post-acquisition? → Total Debt / EBITDA, measuring years required to repay debt from operating earnings
20. Under Regulation F (CFPB's FDCPA implementation), the default call frequency limit for debt collectors contacting a consumer about a single debt is: → No more than 7 calls within 7 consecutive days
21. A company has annual credit sales of $4,380,000 and an accounts receivable balance of $360,000. What is its DSO? → 30 days
22. A debtor's account has been charged off. What does this mean from the original creditor's accounting perspective? → The balance is written off as a loss on the books but the debt still legally exists
23. A CRM system flags a customer as 'at-risk' based on payment behavior. Which metric most likely triggered this flag? → Increasing Days Sales Outstanding (DSO) trend over 90 days
24. Which document in an LC transaction serves as title to the shipped goods? → Negotiable bill of lading
25. Chapter 13 bankruptcy is primarily designed for: → Individuals with regular income who want to repay debts through a 3-to-5-year plan
26. A Merton-style structural credit model estimates PD by treating the firm's equity as a call option. What is the 'default boundary' in this framework? → The asset value level below which the firm cannot service its debt obligations
27. When a company files for Chapter 11, what happens to executory contracts and unexpired leases? → The debtor in possession may assume or reject them, subject to court approval
28. What should a credit policy include? → Criteria for creditworthiness, terms, and overdue account management.
29. The debt-to-EBITDA ratio is commonly used in credit analysis because it measures: → How many years of operating earnings would be needed to repay total debt
30. A bank's credit model shows a KS of 45 on the development sample but only 30 on the holdout sample. What does this discrepancy suggest? → The model is overfitting the development sample