Applied Lending Techniques

The chapter 2 of the book deals with personal finance. As he had rightly pointed out, in todays world, credit scoring becomes the most important factor in evaluating such requests. Yet Mr. Rouse goes ahead and presents five case studies, It is surprising that all the case studies advice 'caution." After studying the case studies, you have a feeling that personal finance is not good at all. The advent of credit scoring as a decision tool probably came into being, by virtue of all bankers having such attitude. This is more evident when you read the classification of personal borrowers, by Mr. Rouse. As per him, there are only two kind of borrowing personalities. One credit averse and who has their personal finance in good condition and two , those who spend in anticipation of expected cash flow. All the case studies provide a conclusion that the borrowers do not have financial discipline. A third type of borrower exist: who borrow for the purpose of creating an asset. The chapter does not take those types into account. As  usual, Mr. Rouse has approached the subject in a simple and lucid manner.