Suppose you are a loan officer at Carbondale Local Bank. Joan Doe listed the following information on
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Question:
Suppose you are a loan officer at Carbondale Local Bank. Joan Doe listed the following information on her mortgage application:
Characteristic | Value |
Annual gross income | $24,000 |
TDS | 20% |
Relations with FI | Both |
Major credit cards | 3 |
Age | 24 |
Residence | Own/Mortgage |
Length of residence | 7.5 years |
Job stability | 9.5 years |
Credit history | Missed 3 payments |
Characteristic | Characteristic Values and Weights | ||||
Annual gross income | <$10,000 | $10,000−$25,000 | $25,000−$50,000 | $50,000−$100,000 | >$100,000 |
Score | 0 | 10 | 20 | 35 | 60 |
TDS | >50% | 35%−50% | 15%−35% | 5%−15% | <5% |
Score | −10 | 0 | 20 | 40 | 60 |
Relations with FI | None | Checking account | Savings account | Both | |
Score | 0 | 10 | 10 | 20 | |
Major credit cards | None | Between 1 and 4 | 5 or more | ||
Score | 0 | 20 | 10 | ||
Age | <25 | 25−60 | >60 | ||
Score | 5 | 25 | 35 | ||
Residence | Rent | Own with mortgage | Own outright | ||
Score | 5 | 20 | 50 | ||
Length of residence | <1 year | 1−5 years | >5 years | ||
Score | 0 | 25 | 40 | ||
Job stability | <1 year | 1−5 years | >5 years | ||
Score | 0 | 25 | 50 | ||
Credit history | No record | Missed a payment in last 5 years | Met all payments | ||
Score | 0 | −15 | 40 | ||
The loan is automatically rejected if the applicant’s total score is less than or equal to 120. The loan is automatically approved if the total score is greater than or equal to 190. A score between 120 and 190 (noninclusive) is reviewed by a loan committee for a final decision.
a. | Calculate Joan Doe’s credit score. |
Credit score |
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