Sample interview questions: How do you assess the credit risk associated with consumer lending products?
Sample answer:
Assessing Credit Risk in Consumer Lending Products
- Data Analysis: Utilize credit reports, financial statements, and other relevant data to evaluate the borrower’s payment history, income, expenses, and assets.
- Scoring Models: Employ statistical models to assign a numerical score that reflects the probability of default. These models consider factors such as debt-to-income ratio, credit utilization, and payment history.
- Qualitative Analysis: Conduct thorough due diligence to assess the borrower’s character, stability, and situational risks. This includes interviews, references, and industry analysis.
- Stress Testing: Simulate various economic scenarios to evaluate the borrower’s ability to repay in adverse conditions, such as job loss or interest rate increases.
- Benchmarking: Compare the borrower’s credit profile to industry benchmarks or historical data to identify potential red flags. Read full answer
Source: https://hireabo.com/job/1_2_31/Credit%20Risk%20Manager