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Credit Analysis Smehra
Credit Analysis for Neal Harris
Neal Harris recently submitted his credit application for our consideration. Mr. Harris is 45 years old, married and has 2 children. He currently works at Franklin Industries where he has been employed as office manager for 2 years. Prior to that, he was in sales at Providencial Insurance for 3 years. Neal has resided at his current residence in Tennessee for 1 year.
His credit application has been filed in joint with his wife, Helen Harris, 43 years old. Helen has recently returned to the workforce from being a housewife. She is also employed by Franklin Industries where she has been marketing director for 4 months. Both individuals have a checking and savings account with AmSouth. The purpose of their loan is for a 2003 Chevrolet Tahoe. Following is a review of the 5 C's of Credit for Mr. And Mrs. Harris and conclusion for their loan.
Capacity
Upon evaluation of the Harris' credit reports, Helen Harris has no outstanding or prior outstanding credit. Neal Harris' credit report is concurrence to his application's list of obligations, which include a mortgage with Countrywide (monthly payment of $1,100.00), and an auto payment with Nissan, of an outstanding balance of $5,000. There are also two credit cards listed...
The Harris' total net income amounts to $4,250.00.
The Harris' should be spending no more than $850 (20%) of their net income on credit purchases. As shown in their application, this total amounts to $600 due in total to American Express and Visa. Discover card is listed as a credit card, but the Harris' have no balance with the company. The Harris' are currently paying $150/month on credit card debit, a total that is well below their 20% capacity. Coupled with their $150/month payment to AmSouth, the Harris' have sufficient capacity for a loan.
Character
Neal Harris currently has a mortgage with Countrywide and an auto payment with Nissan. His current balance for his mortgage is 150,000 ($1,100/month) and for the auto, $5,000 (175/month). In 2001, Mr. Harris filed for Chapter 7. According to his credit report, payments seem to be made in a timely fashion. The Harris' total annual income is $73,000, consisting of annual incomes and a supplementary income from Amway of $3,000. Upon review of Harris' credit report and financial form, his current liabilities lie at $159,900. He appears to be paying his debts off in a timely fashion in accordance with his monthly salary.
Capital
The Harris' have an annual income…
Conclusion
After reviewing the joint credit application for Mr. And Mrs. Harris, I have drawn the conclusion that they should be granted the loan under the terms listed. These are for a loan of $24,000, repayable over 48 months at 4%, minimum monthly payment of $540. While Neal Harris has on record a Chapter 7 file in January, 2001, review of their assets and liabilities reveals that they are suitable candidates for this loan. They also demonstrate timely repayments to their current obligations which include a mortgage with Countrywide, an auto payment with Nissan, and 4 credit cards, one of which is currently at a 0 balance.
The couple is also within the 20% average for credit capacity- net income, and have also demonstrated that they will be able to take on the extra expenditure through this loan through their supplementary income listed. I recommend that AmSouth give Mr. And Mrs. Harris their requested loan under the conditions mentioned.
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