Skip to content

FRM Part II · FRM Exam Part II · Credit Scoring and Retail Credit Risk Management

A card issuer reviews its retail credit lifecycle. Which stage is primarily concerned with deciding whether to raise or lower credit limits on existing accounts based on updated behavioral data?

Account management is the lifecycle stage that adjusts credit limits on existing accounts using behavioral data. Origination only assesses new applicants, and collections handles accounts already delinquent, so neither is mainly about routine limit changes on performing customers.

  1. ACustomer acquisition and origination
  2. BAccount managementCorrect
  3. CCollections and recovery
  4. DPortfolio write-off accounting

Explanation

Account management covers actions on existing accounts, such as limit increases or decreases, authorization strategies and cross-selling, using behavioral data. Origination decides on new applicants, and collections deals with delinquent accounts after payment problems arise.

Did you get it right without looking?

One question tells you little. A timed set on Credit Scoring and Retail Credit Risk Management shows your real accuracy, how long you take and where you lose marks.

Practise Credit Scoring and Retail Credit Risk ManagementFree diagnostic mock

More Credit Scoring and Retail Credit Risk Management questions