Credit scoring

I/ Credit scoring and Rating

Step 1: Credit scoring
Table 1: Charateristics and Capacity
Personal credit scoring

Criteria Scores

100 75 50 25

Part 1: Personality

Age 36-55 26-35 56-60 20-25 (23)

Academic level Post Graduated Vocational High school

graduated college degree

Criminal record None

Residence Owner a Co-owner a Live in Renting (a

status house house parent/relat renting mini-
ives house condo)

Number of <3 3 4 5
residents
Family Core family Live with Live with other
structure parent/rela others
tives

Life insurance > 100 trđ 50-100 trđ 30-50 trđ < 30 trđ (None,
but he is strong
with no
medical
history)

Occupation Manager Staff Skillful Seasonal

worker labor
 Duration of > 7 years 5-7 years 3-5 years 1-3 years
curent
occupation

Place of State agency Private MNCs Freelance

occupation company

Total
Part II: Capacity

Stable monthly > 50 trđ 20-50 trđ 10-20 trđ 5-10 trđ
net surplus
money

All debt < 30% or No 30 -45% 40%-50% 60% -70%

payments/ Total other debts (No
take home pays other debts)

Debt payment Allways on Had extended Had bad Had bad debt,
situation time debts, debt/new pottential
currently client being overdued
paying on debt
time

Other banking Saving and Saving or Current Other loans

services using other banking other banking account or
at our bank services services payment
services only

Total

Total scores = Personality x 40% + Capacity x 60% = 47.5 x 40% + 37.5 x 60% = 41
 Weighted

> 60 or 10%
18-20

Under high 10%

school degree

Yes 10%

other 10%

>5 10%

10%

10%

Unemploym 10%
ent
 < 1 years 10%

None 10%

47.5

< 5 trđ (3 x 30%

80% = 2,4
trđ)

> 75% 30%

Having extented 25%

debts or No
information (no
information)

None 15%

37.5

x 40% + 37.5 x 60% = 41.5

Step 2: Credit rating
- Credit Rating: Base on total scores, rating will be classifieded in to 10 groups:
Scores Rating

95-100 AAA

90-94 AA

85-89 A

80-84 BBB

70-79 BB

60-69 B

50-59 CCC

40-49 CC

35-39 C

< 35 D
ng will be classifieded in to 10 groups:
Risk potential

Low

Average

High
 II/ Collateral Evaluation
Criteria Scores

100 75 50 25

Type of Valuable papers Valuable papers Real estate Real estate (for
collaterals issued by our issued by other (housing) trading), other
bank/Govern banks (excluding estates, stocks
ment Bonds stocks)

Value of > 200% 150-200% 100-150% 70-100%

collaterals/ (approximately
Total debts 85%)

Flucutation of 0% or no trend 1-10% 10-30% 30-50%

asset price in 2
years

- Collateral Rating:
Scores Rating Collateral Evaluation

225-300 A Strong

75-224 B Average

< 75 C Low
 0

No collateral

< 70%

>50% Total =100

Evaluation

ng

age

w
 III/ Summary and Decision
Matrix combined credit rating and collateral

Credit rating/Collateral Rating A B

AAA Excellent Good

AA

BBB Good Average

BB

CCC Average/ Deny

Deny
CC

D
collateral

Average

Average/ Deny

Deny
 Ways to improve credit scores and rating
1. Build a Credit History: Since A Nguyen currently has no credit history record, he can start by applying fo
current bank (VCB). Making timely payments on these accounts will help establish a positive credit history.
2. Maintain Good Payment Behavior: It's important for A Nguyen to consistently make on-time payments fo
current account at VCB or any new credit accounts he opens.
3. Increase Income Stability: A Nguyen can work towards securing a more stable employment situation, suc
contract to a permanent position or seeking additional sources of income to supplement his salary.
4. Reduce Debt-to-Income Ratio: A Nguyen should avoid taking on additional debt and work towards payin
debt-to-income ratio. This demonstrates financial responsibility to lenders.
5. Consider Life Insurance: While A Nguyen may be strong and healthy with no medical history, having life
financial security and may be viewed positively by lenders.
6. Maintain Stable Residence: A Nguyen should aim to maintain a stable residence, as stability in housing c
creditworthiness.
7. Monitor Credit Report: A Nguyen should regularly monitor his credit report to check for any errors or ina
This ensures that his credit information is up-to-date and accurate.
8. Improve The Situation Of Occupation: A Nguyen should try to become an official staff at VCB