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Credit Scorecards
Credit analysis is the understanding and evaluation to check if an individual, organization, or business is worthy of credit. Credit Risk scorecards are mathematical models which use a formula that consists of data elements or variables that are used to determine a probabilistic threshold that can be used to determine risk tolerance. These scores display a defined behavior (e.g. loan default, bankruptcy, or a lower level of delinquency) with respect to their current or proposed credit position with a lender. Credit/Loan Officers are people who are employed by the bank and who are responsible for evaluating and authorizing the customer's loan application. Scorecards are built and optimized to evaluate the credit file of a homogeneous population (e.g. files with delinquencies, files that are very young, files that have very little information). Most empirically derived credit scoring systems have between 10 and 20 variables.Murray Bailey "Practical Credit Scoring: Issues and Techn ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Credit Analysis
Credit analysis is the method by which one calculates the creditworthiness of a business or organization. In other words, It is the evaluation of the ability of a company to honor its financial obligations. The audited financial statements of a large company might be analyzed when it issues or has issued bonds. Or, a bank may analyze the financial statements of a small business before making or renewing a commercial loan. The term refers to either case, whether the business is large or small. A credit analyst is the finance professional undertaking this role. Role One objective of credit analysis is to look at both the borrower and the lending facility being proposed and to assign a risk rating. The risk rating is derived by estimating the probability of default by the borrower at a given confidence level over the life of the facility, and by estimating the amount of loss that the lender would suffer in the event of default. Credit analysis involves a wide variety of financ ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Credit Risk
A credit risk is risk of default on a debt that may arise from a borrower failing to make required payments. In the first resort, the risk is that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs. The loss may be complete or partial. In an efficient market, higher levels of credit risk will be associated with higher borrowing costs. Because of this, measures of borrowing costs such as yield spreads can be used to infer credit risk levels based on assessments by market participants. Losses can arise in a number of circumstances, for example: * A consumer may fail to make a payment due on a mortgage loan, credit card, line of credit, or other loan. * A company is unable to repay asset-secured fixed or floating charge debt. * A business or consumer does not pay a trade invoice when due. * A business does not pay an employee's earned wages when due. * A business or government bond issuer does not make a payment on ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
CIBIL
TransUnion CIBIL Limited is a credit information company operating in India. It maintains credit files on 600 million individuals and 32 million businesses. TransUnion is one of four credit bureaus operating in India and is part of TransUnion, an American multinational group. Consumer Credit Reporting Trans Union CIBIL aggregates consumer borrowing and payment information for the purpose of assessing loan risk and pricing credit (setting the interest rate). It has partnered with Chicago-based TransUnion. Consumer credit scores are also used in unemployment decisions, although there are no studies in India showing that impaired credit leads to employee misconduct and unemployment. Business Credit Reporting TransUnion CIBIL aggregates business financial and payment information for the purpose of assessing loan risk and pricing credit (setting the interest rate. It has partnered with New Jersey based Dun and Bradstreet The Dun & Bradstreet Corporation is an American compa ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
TransUnion
TransUnion is an American consumer credit reporting agency. TransUnion collects and aggregates information on over one billion individual consumers in over thirty countries including "200 million files profiling nearly every credit-active consumer in the United States". Its customers include over 65,000 businesses. Based in Chicago, Illinois, TransUnion's 2014 revenue was US$1.3 billion. It is the smallest of the three largest credit agencies, along with Experian and Equifax (known as the "Big Three"). TransUnion also markets credit reports and other credit and fraud-protection products directly to consumers. Like all credit reporting agencies, the company is required by U.S. law to provide consumers with one free credit report every year. Additionally a growing segment of Transunion's business is its business offerings that use advanced big data, particularly its deep AI-TLOxp product. History TransUnion was originally formed in 1968 as a holding company for Union Tank Car C ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Experian
Experian is an American–Irish multinational data analytics and consumer credit reporting company. Experian collects and aggregates information on over 1 billion people and businesses including 235 million individual U.S. consumers and more than 25 million U.S. businesses. Based in Dublin, Ireland, the company operates in 37 countries with offices in Brazil, the United Kingdom, and the United States. The company employs approximately 17,000 people and had a reported revenue of US$5.18 billion for the fiscal year ended in March 2020. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. Experian is a partner in USPS address validation. It is one of the "Big Three" credit-reporting agencies, alongside TransUnion and Equifax. In addition to its credit services, Experian also sells decision analytic and marketing assistance to businesses, including individual fingerprinting and targeting. Its consumer services include online access to credit hist ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Equifax
Equifax Inc. is an American multinational consumer credit reporting agency headquartered in Atlanta, Georgia and is one of the three largest consumer credit reporting agencies, along with Experian and TransUnion (together known as the "Big Three"). Equifax collects and aggregates information on over 800 million individual consumers and more than 88 million businesses worldwide. In addition to credit and demographic data and services to business, Equifax sells credit monitoring and fraud prevention services directly to consumers. Equifax operates or has investments in 24 countries in the Americas, Europe, and Asia Pacific. With over 14,000 employees worldwide, Equifax has nearly US$5 billion in annual revenue and is traded on the New York Stock Exchange (NYSE) under the symbol EFX. History Equifax was founded by Cator and Guy Woolford in Atlanta, Georgia, as Retail Credit Company in 1899. By 1920, the company had offices throughout the United States and Canada. By the 1960s, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Dun & Bradstreet
The Dun & Bradstreet Corporation is an American company that provides commercial data, analytics, and insights for businesses. Headquartered in Jacksonville, Florida, the company offers a wide range of products and services for risk and financial analysis, operations and supply, and sales and marketing professionals, as well as research and insights on global business issues. It serves customers in government and industries such as communications, technology, strategic financial services, and retail, telecommunications, and manufacturing markets. Often referred to as D&B, the company's database contains over 500 million business records worldwide. History 1800s Dun & Bradstreet traces its history to July 20, 1841, with formation of The Mercantile Agency in New York City by Lewis Tappan. Recognizing the need for a centralized credit reporting system, Tappan formed the company to create a network of correspondents who would provide reliable, objective credit information to subscr ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Credit Bureau
A credit bureau is a data collection agency that gathers account information from various creditors and provides that information to a consumer reporting agency in the United States, a credit reference agency in the United Kingdom, a credit reporting body in Australia, a credit information company (CIC) in India, Special Accessing Entity in the Philippines, and also to private lenders. It is not the same as a credit rating agency. Description A consumer reporting agency is an organization providing information on individuals' borrowing and bill-paying habits. Such credit information institutions reduce the effect of asymmetric information between borrowers and lenders, and alleviate problems of adverse selection and moral hazard. For example, adequate credit information could facilitate lenders in screening and monitoring borrowers as well as avoiding giving loans to high risk individuals. Lenders use this to evaluate credit worthiness, the ability to pay back a loan, and can a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Consumer Credit Risk
''The following article is based on UK market, other countries may differ.'' Consumer credit risk (also retail credit risk) is the risk of loss due to a consumer's failure or inability to repay ( default) on a consumer credit product, such as a mortgage, unsecured personal loan, credit card, overdraft etc. (the latter two options being forms of unsecured banking credit). Consumer credit risk management Most companies involved in lending to consumers have departments dedicated to the measurement, prediction and control of losses due to credit risk. This field is loosely referred to consumer/retail credit risk management, however, the word ''management'' is commonly dropped. Scorecards A common method for predicting credit risk is through the credit scorecard. The scorecard is a statistically based model for attributing a number (''score'') to a customer (or an account) which indicates the predicted probability that the customer will exhibit a certain behaviour. In calculating th ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Mathematical Model
A mathematical model is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling. Mathematical models are used in the natural sciences (such as physics, biology, earth science, chemistry) and engineering disciplines (such as computer science, electrical engineering), as well as in non-physical systems such as the social sciences (such as economics, psychology, sociology, political science). The use of mathematical models to solve problems in business or military operations is a large part of the field of operations research. Mathematical models are also used in music, linguistics, and philosophy (for example, intensively in analytic philosophy). A model may help to explain a system and to study the effects of different components, and to make predictions about behavior. Elements of a mathematical model Mathematical models can take many forms, including dynamical systems, statisti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Criticism Of Credit Scoring Systems In The United States
Credit scoring systems in the United States have garnered considerable criticism from various media outlets, consumer law organizations, government officials, debtors unions, and academics. Racial bias, discrimination against prospective employees,"Millions Need Not Apply" '''', May 29, 2011. discrimination against medical and student debt holders, poor predictability, manipulation of credit scoring |
Credit Score
A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual. A credit score is primarily based on a credit report, information typically sourced from credit bureaus. Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers and to mitigate losses due to bad debt. Lenders use credit scores to determine who qualifies for a loan, at what interest rate, and what credit limits. Lenders also use credit scores to determine which customers are likely to bring in the most revenue. Credit scoring is not limited to banks. Other organizations, such as mobile phone companies, insurance companies, landlords, and government departments employ the same techniques. Digital finance companies such as online lenders also use alternative data sources to calculate the creditworthiness of borrowers. By country Australia In Australia, cre ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
