The article examines how two credit policies affect banks' lending decisions. When faced with stricter loan-to-value rules, banks give loans above the cap to firms with good credit history and charge higher interest rates. Firms affected by the policy seek other types of loans. Under a collateral guarantee scheme, banks prefer firms with strong credit histories and longer relationships. Riskier firms are not favored under the scheme. Loans under the scheme are larger, longer, and have higher interest rates. Banks with higher scheme utilization offer less general-purpose loans.