RBCC Ltd, a local commercial bank, want to venture into the credit card market. However, their research has shown that potential customers demand a fast turn-around time. In addition to its access to the external credit information agencies, the bank would like to design their own in-house credit scoring system. The bank will use a minimum score of 950 for its automatic credit card approval. The interest rate given to customers will range from 33% - 39%. with those achieving minimum score getting the highest rate, while those achieving a high score getting a more favourable rate.

 

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You have now been tasked with designing this credit scoring system based on the usual customer characteristics or variables that are evaluated when assessing a loan application for an individual or small business. Each characteristic or variable should be assign a maximum score of 250. Your system should contain a minimum of five characteristics. Use an individual case, with a recommended interest rate, to demonstrate to the bank that the system is workable.

Answer rating: 100% (QA)

One possible credit scoring system with five characteristics and their respective maximum scores is 1 Credit history 250 points This evaluates the app... View the full answer