Chapter 6 - Lesson 2
Bank Loans

As you learned in your textbook, the FICO credit-scoring system is widely used to determine a consumer's creditworthiness. Some analysts and consumer advocates, however, are critical of the FICO scoring system. HSH Associates, a financial publisher, has posted a discussion of the FICO system on its web site. Read through the information to answer the following questions.

Suggested keywords: FICO, HSH Associates
Web site: http://www.hsh.com/pamphlets/aboutfico.html

Your Name:

Today's Date:

Question 1:
In theory, someone with a 900 FICO score should get much better interest rates than someone with a 650 score. What has been the reality, according to the HSH site? How do you explain this?

Question 2:
What is the problem with credit scoring, according to this web site? Why? Do you agree? Why or why not?

Question 3:
How has credit scoring possibly caused the rise of ''predatory lending,'' or overcharging for loans?