Introduction: In the financial industry, consumers regularly request credit to make purchases. The risk for financial institutions to extend the requested credit depends on how well they distinguish the good credit applicants from the bad credit applicants. One widely adopted technique for solving this problem is “Credit Scoring.” Credit scoring is the set of decision models and their underlying techniques that aid lenders in the granting of consumer credit.
Credit Scoring: Business Objectives, The application of scoring models in today’s business environment covers a wide range of objectives. The original task of estimating the risk of default has been augmented by credit scoring models to include other aspects of credit risk management: at the pre-application stage (identification of potential applicants), at the application stage (identification of acceptable applicants), and at the performance stage -(identification of possible behavior of current customers).Click here to read more on Credit Scoring…
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