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A method to determine a relative ranking of customers credit worthiness

IP.com Disclosure Number: IPCOM000015032D
Original Publication Date: 2001-Nov-26
Included in the Prior Art Database: 2003-Jun-20

Publishing Venue

IBM

Abstract

Credit Scoring is one of the worlds most commonly used method to decide whether a financial institution should grant a credit product such as credit card, loan services or mail order purchase, to their applicants. This result of this assessment method is a score that enables financial institutions to determine the applicants' credit worthiness. In general, the higher that credit score, the more trust worthy that this applicant is. However, before this score can be calculated, a credit scorecard must be built place prior to the scoring exercise. A credit scorecard is a decision making tool which is developed by means of statistical analyses. The analytical procedures involved in developing such credit scorecards are: 1) Data Collection and Sampling 2) Scorecard Definition and Scorecard Splitting 3) Good/Bad Definition