A Condensed Look Inside the Credit Scoring Industry

Key Terminologies Credit risk Scoring is a tool used to evaluate the level of credit risk associated with applicants or customers providing statistical odds, or probability that an applicant with any given score will be good or bad . Credit scoring offer a quick and proven way to use the data , not just for reducing losses but also lead to greater profitability. Credit Score is a digit (commonly 3 digits ranging from 200-900 depending on institution) that summarizes a customer's credit risk based on their credit report and it predicts how you manage your credit(debt) and it helps the lenders to assess the rusks upon lending. Scorecard is a management tool that generates credit score of an applicant based on their creditworthiness. It consists of a group of characteristics, statistically determined to be predictive in separating good and bad accounts. It can be developed In-house or outsourced. scorecards can also be defined based on the type of data used to develop them. Custom scoreca