A note on the role of memory in commercial loan officers' use of accounting and character information

A concept called ''the five C's of credit'' is the basis of a theory about the role of memory in loan officers' credit analysis. It is predicted that recall of two related types of information, accounting and information about borrowers' character, is greater when facts are consistent with loan decisions and judgments than when they are inconsistent. Results of an experiment support the prediction when information consistency is defined relative to decisions whether to approve or deny loans, but not when it is related to judgments of the risk of nonpayment. Copyright (C) 1996 Elsevier Science Ltd