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Discuss the Factors That Are Used in Determining Credit Scoring

question 83

Essay

Discuss the factors that are used in determining credit scoring in the FICO model.


Definitions:

Checking Account Balances

The amount of money currently available in one’s checking account, reflecting all deposits and withdrawals made.

Traveler's Checks

A preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.

Credit Cards

Financial instruments that allow users to borrow funds from a pre-approved limit to pay for goods and services, with the expectation of paying back the borrowed amount along with any applicable interest.

Opportunity Cost

The value of the next best alternative that is foregone as a result of making a decision to pursue a particular action.

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