Credit Scoring Models Are Used to Discriminate Between Good and Bad

question 11

Multiple Choice

Credit scoring models are used to discriminate between good and bad credit applicants.Which of the following items is a major weakness of this approach?

• A)they cannot be applied to a company receiving numerous consumer credit applications
• B)they are too time consuming to apply
• C)they can only take one customer attribute into account at a time
• D)they do not look at collateral

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Definitions:

Interest Group

An organization or group of people that seeks to influence public policy and decision-making to further their common interests or goals.

Money Circulation

The movement of currency and other forms of money as it is exchanged and used within an economy.

Creditors

Individuals or institutions that lend money or extend credit to others, expecting to be repaid, usually with interest.