San Carlos Bank and Trust Company uses a credit-scoring system to evaluate most consumer loans that amount to more than $2,500. The key factors used in its scoring system are found at the conclusion of this problem.
The Mulvaney family has two wage earners who have held their present jobs for 18 months. They have lived at their current street address for one year, where they rent on a six month lease. Their credit report is excellent but shows only one previous charge. However, they are actively using two credit cards right now to help with household expenses. Yesterday, they opened an account at San Carlos and deposited $250. The Mulvaneys have asked for a $4,500 loan to purchase a used car and some furniture. The bank has a cutoff score in its scoring system of 30 points. Would you make this loan for two years as they have requested? Are there factors not included in the scoring system that you would like to know more about? Please explain.