Determine credit risks

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You are sitting at a bank loan officer''s desk, applying for a fairly large loan. The loan officer explains the bank''s policy of using a credit-scoring model in which you have to attain a minimum cutoff score to receive your requested loan.

"We do this to guard against a bad credit risk," the loan officer tells you.

Do you feel that the credit-score model is an accurate measure for determining credit-worthiness? Share your thoughts and/or suggestions about this practice where a bank uses cutoff scores to determine credit risks. Support your thoughts with details and examples from your readings and studies.

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This assignment talks about credit score model. A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual. A credit score is primarily based on a credit report information typically sourced from credit bureaus.Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk A Credit Score is a three digit number that broadly ranges between 300 and 850. Having a high scoreincreases your chances of getting a loan or

Reference no: EM131505024

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