Credit Approval or Decline Report - Comprehensive Analysis and Justification

Task Assessment

1.Review Client scenario that has been assigned to you.  

2. You have been provided with the client’s profile, credit rating, credit score and balance sheet and other relevant information that would be presented/obtained during a credit interview.

3.Assume that you are the lending officer, and the client within your scenario is applying for credit 

4. Analyze the information given and evaluate whether or not you would approve or decline the credit being asked for. 

You MUST prepare a comprehensive report with your analysis and your justification for the approval or decline for your assigned scenario (at a minimum, your report should contain the three elements listed below)

To provide learners with practice in applying the 5 C’s of credit and credit rating/scoring information on realistic client scenarios to approve or decline credit requests. As this is an integral part of the job description for bank sales staff, this will give learners some initial practice in this regard.

When completing your analysis consider and evaluate all 6 C’s in the credit granting process and comment on each in your evaluation:

Analyze current ratings, past ratings and credit score and write an explanation on how this information would impact the decision to approve or decline

Calculate the GDS and TDS ratios based on new credit being applied for

Comment on job history and length of time on job

Job stability

Indicate how this information will impact the decision

Analyze assets, savings habits, liabilities, types of debts and comment on positives and negatives and impact on credit granting process

What could be used as collateral

Anything else to be proposed for collateral

Justify your answers

Comment on job prospects, payment history, savings ability, money management skills, spending habits, use of debt, reliance on credit

Economic conditions and how this would impact employment and lending criteria. Economic conditions on type of credit being applied for

Will you approve or decline the credit

Justification for approval or decline

If approving the credit—any Conditions of approval that you may add

Type of credit granted if an alternative credit is proposed from what asked for

Insurance requirements

Collateral requirements

Fixed or revolving credit

Savings program to be established

Anything else (ie. Consolidating debt into one)

If declining the credit---any Alternatives and Suggestions  that you would give the client (remember this is difficult situation for any customer to be declined)

Reapplying in future

Saving more money

Cleaning up credit rating

Anything else

Be creative you are attempting to still assist client

What other banking products would you recommend for this customer at this time that are applicable to this situation or to the client.

Insurance

Savings products

Transferring products to your bank

Other products (investments, accounts, retirement products, credit products