Credit scoring applied to mortgages – ROC and Role!

The application of credit scoring technologies to loan decision making is well established in the domain of consumer credit. However the application of credit scoring to mortgage loans is relatively youthful, and presents new challenges. Is there a role for credit scoring in the mortgage environment? This paper presents the findings of a case study, undertaken with the co-operation of a UK mortgage lender. The case study organisation currently evaluates mortgage loans using a judgmental decision making process. This paper summarises the development of a bespoke credit scorecard, and examines its empirical performance.