This article sets out to contribute to the understanding of the dynamics of retail credit premiums (i.e. the difference between reference interest rates and rates on retail loans with comparable maturities) in the Czech economy. The text documents the history of the credit premium. A model that investigates the relationship between this premium and the business cycle is then proposed, and it is shown that the current premium level can be explained to a large extent by the cyclical position of the economy. This model can be used not only as a tool for explaining the observed premium, but also to forecast the future premium, as it is linked to the variables used in the CNBâ€™s core forecasting model.