What analytics type will be used to address the following question, "Will a potential borrower repay a loan (based on credit score, payment history, existing debt, and so on)?"?
Question
What analytics type will be used to address the following question, "Will a potential borrower repay a loan (based on credit score, payment history, existing debt, and so on)?"?
Solution
The type of analytics that will be used to address the question, "Will a potential borrower repay a loan (based on credit score, payment history, existing debt, and so on)?" is Predictive Analytics.
Here's why:
-
Predictive Analytics is used when we want to predict the likelihood of a certain type of future event happening. In this case, we want to predict whether a potential borrower will repay a loan.
-
The factors mentioned - credit score, payment history, existing debt, and so on - are all historical data points. Predictive Analytics uses such historical data to create a statistical model of what
Similar Questions
Banks and lenders use credit scores to determine . . .The likelihood that someone is able to repay debtHow much collateral someone has available to put up for a loanA person's financial responsibilityHow successful someone is
Which of the following debt repayment profiles involves a growing / accrued interest amount over time?Mezzanine financeSenior DebtEquity
The ratio that indicates if a borrowing company will be able to meet its required interest payments is the
A number assigned to you that helps a lender judge your ability to repay a loan is called a _____.A.credit scoreB.debt-to-credit ratioC.debt ratingD.credit limit
Which of the following is most likely to represent a fixed rate, secured debt?*1 pointA student loanA credit cardA loan from a friendA dealer-financed auto loan
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.