As we learned in the lesson on credit scores the 35% of the borrowers score is related
to credit quality. If the consumer has poor credit they receive fewer points.
Calculate the debt to income ratio for each borrower. The debt to income ratio must
be 1:2. Total debt includes all expenses plus taxes.
Income per person
Calculate the debt per person. What is the ratio of family members to Net Income?
Bank policy requires at least 300 per person with a total income to person ratio
of 4 to 1.
This person makes a very good salary. There are 4 people in the family. There credit
report show all payments made on time.
They want your bank to finance the purchase of a new Honda Accord.
Consumer 2 has been an accountant for 3 years. There are two people in the family.
The credit report show a student loan, a house loan, and several late payments on
a credit card. All payments are now current.
Consumer 2 would like the bank to finance the purchase of a used Nissan Sentra.
A college graduate is starting their first job as a teacher. They have a current
student loan. They are single and live with a roommate. They rent an apartment for
Our college graduate is asking the bank to finance a used lime green VW Bug.
Submit your recommendation
Use the Excel workbook to calculate the ratios. Analyze the scenarios, and submit
a Word document containing your approval or recommendation to the lending supervisor
If you are done early complete a report on how buying a
car financing works? If you did the
bonus assignment in the last lesson, then choose a different topic from the one
that you selected in the last lesson.
The report will be 1 page double spaced in 12 point Arial font.