In the era of high-quality development of China’s economy, how to effectively prevent and control bank credit risk and firmly hold the bottom line of systemic risk is a major theoretical and practical issue worth studying. Different from the previous literature, based on the micro-perspective, from the perspective of bank screening high-quality customers,this paper empirically tests the impact of internal control quality on the bank’s credit risk identification ability by using the 7317 "bank-listed company-annual" observations involved in the single loan contract signed by A-share listed banks and listed companies in the Shanghai and Shenzhen Stock Exchange from 2007 to 2018. The study found that compared with banks with lower internal control quality, Banks with higher internal control quality are more likely to choose borrowers with lower risk level and have higher risk pricing ability, it is mainly reflected in two aspects: setting higher loan interest rate for borrowers with higher risk level and requiring loan guarantee. Through further research, this paper clarifies the role of various components in the bank’s internal control, analyzes the heterogeneous role of different types of borrowing enterprises, and explores the role of the bank’s internal control in punishing credit related violations by regulatory authorities.The above research results not only enrich the relevant literature of credit risk governance research from the micro level, but also reveal the internal impact mechanism of internal control on the bank’s credit risk identification ability.They provide important empirical evidence for banks to effectively prevent and control credit risk and achieve high-quality development, and also provide theoretical reference for the banking regulatory authorities to strengthen financial supervision.