MEMO Assignment Example | Topics and Well Written Essays - 1000 words

MEMO - Assignment ExampleFICO haemorrhoid argon reviewed by almost all lender agencies in America, before they arrive at point of reference decisions to broaden their clients doctrine. For that reason, through the proper usage and incorporation of the scores, as a banker, you will be able to stave off customers with poor credit history, which will improve the financial performance of Fidelity bank. Overview of the main Fico Scores The FICO scores of customers will take into account, five main data categories that relate to the customers credit profile. When exploitation FICO scores to determine the customers that thunder mug be offered loans, the chart given below displays the comparative weight offered to the various score areas. The 5 main areas featured in FICO scoring and their relative weight The review of the disparate ingredients of the FICO scores 1. Payment history The payment history of the customer contributes about 35 percent of their FICO score. The informati on reflects their information on contrastive financial accounts and areas. The different accounts reflected through the information include Credit gameboard worth and standing, for cards like MasterCard, Visa, Discover and American Express. The second accounts featured are retail accounts, where the customers financial operations reflect the credit collected from outlets where they do business showing the credit cards used at departmental stores, and the credit history maintained. The third account reflected is installment loans, where systematic reimbursements for loans like mortgages or car loans are reflected. The fourth account reflected through the payment history is pay company records. Additionally, collection items and public records are reflected, giving information on events like foreclosures, bankruptcies, wage attachments, lawsuits, perspicacity and liens. Lastly, this score area gives information on the accounts that dont show late payments, and whose financial ob ligations are met as agreed upon. From the information captured about the different accounts and issues named before, you will use your judgment to sustain whether the given customer has shown a history of repaying loans and whether their financial standing warrants the loan they are asking for. thereof based on the information captured, you will only offer credit to a customer with a favorable credit history and avoid those with poor payment history, because a poor history shows that they are more likely to give problems when repaying the credit. 2. The second area where you need to pay much attention is the field of the amounts owed. This information reflects about 30 percent of a customers FICO scores, which indicates their level of indebtedness. The areas reflected by this changeable include the amounts owed for the different accounts held by the customer, the amounts apportioned to different account types, the balances from different account types, the proportion of the cre dit consumed through credit cards among other credit accounts and how much the customer is yet to pay, on different loan amounts. Through the review of this score area, as bankers you will determine the level of debt that the customer has collected, which can influence their ability and their pattern of loan repayment. For example, from the case of a customer who has used larger proportions of their