Using a transactor/revolver scorecard to make credit and pricing decisions

Using a transactor/revolver scorecard to make credit and pricing decisions

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Article ID: iaor20141909
Volume: 59
Start Page Number: 143
End Page Number: 151
Publication Date: Mar 2014
Journal: Decision Support Systems
Authors: , , ,
Keywords: risk, finance & banking
Abstract:

  • We develop an approach to estimate credit customers' profitability and default risk.
  • We build a transactor/revolver scorecard and Good/Bad scorecard over the revolvers.
  • We compare this approach with the standard approach in credit scoring.
  • Results show that our approach is similar to the standard method in predicting default.
  • Results indicate that our approach is more accurate in estimating profitability.
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