Find the credit score for each of the applicants

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Reference no: EM131316864

International Oil Company (IOC) uses credit scoring to evaluate gasoline credit card applications. The following table presents the financial and credit characteristics and weights (indicating the relative importance of each characteristic) used in the credit decision. The firm's credit standards are to accept all applicants with credit scores of 80 or higher, to extend limited credit on a probationary basis to applicants with scores higher than 70 and lower than 80, and to reject all applicants with scores below 70.

Financial and Credit Characteristics	Predetermined Weight
Credit references	0.25
Education	0.1
Home ownership	0.1
Income range	0.15
Payment history	0.3
Years on job	0.1

The firm needs to process three applications that were recently scored by one of its credit analysts. The scores for each of the applicants on each of the financial and credit characteristics are summarized in the following table.

Financial and Credit Characteristics	Applicants' Scores (0 to 100)
Financial and Credit Characteristics	X	Y	Z
Credit references	60	90	80
Education	75	80	80
Home ownership	100	90	60
Income range	70	70	80
Payment history	60	85	70
Years on job	50	60	90

a. Use the data presented to find the credit score for each of the applicants.

b. Recommend the appropriate action that the firm should take for each of the three applicants.

Reference no: EM131316864

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