Financial

Credit Limit Adjustment

Data-driven solution that evaluates payment history, utilization, and financial behavior to automatically recommend credit limit changes.

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Solution

This credit limit adjustment system evaluates customer accounts to identify optimal credit limit modifications based on multiple risk factors. The system analyzes payment reliability through on-time payment percentages and recent late payment occurrences. It examines credit utilization by assessing current usage percentages and six-month average patterns to identify healthy borrowing behaviors.

The solution also evaluates broader financial stability indicators including recent credit inquiries, relationship longevity with the financial institution, income verification status, and product portfolio diversity. By combining these factors into a weighted scoring system, it generates percentage-based recommendations for increasing or decreasing credit limits with detailed justifications. Each recommendation includes specific dollar amounts for limit adjustments based on the customer's existing credit allocation.

How it works

The decision system processes account information through multiple evaluation stages:

  1. Payment History Analysis: Evaluates on-time payment percentage and recent late payments to assign a payment history rating and score.
  2. Utilization Assessment: Analyzes current utilization percentage and 6-month average to determine credit usage patterns and apply a utilization score.
  3. Financial Behavior Evaluation: Reviews credit inquiries, relationship tenure, and income verification status to establish a financial behavior rating and score.
  4. Score Aggregation: Combines all evaluation scores into a total adjustment score to determine the overall account strength.
  5. Recommendation Calculation: Maps the total score to specific percentage-based credit limit adjustments with supporting justifications.
  6. Final Determination: Calculates the exact dollar amount change and new credit limit based on the recommended percentage adjustment.

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