Credit scoring systems can be used to:

Question

Quizplus · Accepted Answer

Credit scoring systems are designed to evaluate credit risk based on the borrower's characteristics. These systems analyze various factors, such as credit history, income, debt-to-income ratio, and other relevant data to determine the likelihood of a borrower repaying their debt on time. This information is then used to determine whether to approve a credit application and what interest rate to offer. Credit scoring systems do not have a direct impact on the cost of goods sold, nor do they evaluate Dun & Bradstreet reports. However, by providing lenders with a better understanding of a borrower's creditworthiness, credit scoring systems can help reduce the effective cost of trade by lowering default rates and minimizing losses on bad debt.

Credit Scoring Systems Can Be Used To