DECISION TREE IN A NUTSHELL

When a bank considers whether it would offer a loan to someone or not, it considers a chronological list of questions to decide if it's safe to approve such a loan. The questions under consideration could begin with simple ones such as what's the individual's annual income. Based on the answers, the next set of questions could involve finding out if the person has any existing loans, has defaulted on credit card payments, etc. Assuming the person draws a salary of $30,000, has no existing loans or criminal record, and makes his credit card payments on time, the bank may offer him the loan. You can call this a basic form of a decision tree.