FICO generally includes in the development of its credit scores with a rough estimate of the

emphasis they place on each category.

True 

Corporate credit ratings apply to

corporations

Credit ratings apply to individuals, while credit scores apply only to businesses and

government.

False 

The amount the creditor believes is the maximum debt the customer can incur and repay
promptly.
credit limit
Debtors use credit scores to evaluate the probability that an individual will repay his or her
debts.

False 

Only estimated 8% of the applicants in this score range are likely to be seriously delinquent
in the future.
670 - 739
The following are the advantages of credit limits, except
credit extension wasted sales effort and provide to some degree a more or less automatic
control of credit extensions
This predicts the borrower likelihood of defaulting at any given time in the extended future.
long-term credit rating
It is the most common credit score used to determine loan eligibility and the interest rates a
person pays.
FICO score
Audited financial statements
can provide a good view of the business’s liquidity, profitability and cash flow.
A company that uses statistics and mathematical formulas called algorithms to determine a
person’s credit score.
FICO
The following items are the factors that determine the credit limit
I   - character
II  - capacity
III - capital
IV - personal loans

I, II & III only

Upper limit is usually establish within which the credit of any borrower is set on the basis of
his ability to pay and on the requirements as judge by the purposes for which the loan is
made.
personal loans
A credit report
is a loan and bill payment history kept by a credit bureau.  
A debt instrument with a rating below BB is considered to be a speculative grade or a  junk
bond.

True 

 In relation to credit application, bank reports

give details of the bank’s relationship with the company, the company’s borrowing capacity
and its level of debt.

A quantified assessment of the credit worthiness of a borrower in terms of general forms or

with respect to a particular debt or financial obligation is known as

credit rating
A credit score is a person's financial story packed into a three-digit number, which indicates
a person's credit risk.

True 

Sovereign credit ratings apply to

national government
Applicants in this range are considered subprime borrowers.
580 - 669
If the property has a zonal value of P 4,500 per square meter and has an area of 950 sq. m., the
property has a total appraised value of
P 4,275,000
It is normal for credit professionals to discuss with anybody something about discriminatory
trade practices or anything that might be construed as restraint of trade or in violation of
antitrust legislation.

False 

In the appraisal of machinery and equipment, the original invoice or historical cost is considered
in determining the appraised value of this method.
 Percentage of acquisition cost

 A credit investigation is made up of

I. Personal interview with the applicant in his residence or place of business or both
II. Documentary verification
III. Inquiry from third parties
Appraise the creditors’ ability to pa

I, II & III only

Movable machinery and equipment are those that cannot be uprooted or removed without
defacing or destroying the property.

False 

Verification of the applicant’s personal and credit reputation can be done through third-
party inquiries.

True 

The goal of the investigation is to obtain factual and accurate information that will lead to
an appropriate credit decision. 

True 

Immovable properties are classified as either agricultural, residential, commercial, or

industrial.

False 

An appraisal of prospective borrower's ability and willingness to repay a loan, carried out by
a credit analyst is

Credit investigation
First Statement: Verification of the applicant’s personal and credit reputation can be done
through third-party               inquiries.
Second Statement:  Spurious titles of property can be accepted as collateral to obtain
credit.

Only first statement is true

The following items enumerated below are instances of fraud, except
 Land with torrens title
A property that is not owned and not possessed by the borrower is unacceptable as
collateral.

True 

Ownership and possession of properties presented as collateral need not be verified.

False

They are responsible for performing credit analysis of clients.

credit investigator
A property of appraisal is an estimate of
price 
 I.  Credit investigators are responsible for      performing credit analysis of clients
  II. Credit investigators work for bank, credit management companies, trading organizations
granting credit
Both statements are true
In the appraisal of machinery and equipment, the original invoice or historical cost is considered
in determining the appraised value in this method.
Percentage of acquisition cost
Spurious titles of property can be accepted as collateral to obtain credit.

False 

The credit professional has an obligation to their employer and to the credit community in
general to behave professionally and to guard against violating, even unintentionally, any
laws against restraint of trade.

True