Credit Scoring and Its Applications

Lyn Thomas (Author), Jonathan Crook (Author), David Edelman (Author)

9781611974553

Paperback / softback, published 30 November 2017

368 pages
22.9 x 15.2 x 2 cm, 0.84 kg

Credit Scoring and Its Applications is recognized as the bible of credit scoring. It contains a comprehensive review of the objectives, methods, and practical implementation of credit and behavioral scoring. The authors review principles of the statistical and operations research methods used in building scorecards, as well as the advantages and disadvantages of each approach. The book contains a description of practical problems encountered in building, using, and monitoring scorecards and examines some of the country-specific issues in bankruptcy, equal opportunities, and privacy legislation. It contains a discussion of economic theories of consumers' use of credit, and readers will gain an understanding of what lending institutions seek to achieve by using credit scoring and the changes in their objectives.

New to the second edition are:

• lessons that can be learned for operations research model building from the global financial crisis
• current applications of scoring
• discussions on the Basel Accords and their requirements for scoring
• new methods for scorecard building and new expanded sections on ways of measuring scorecard performance, and
• survival analysis for credit scoring.

Other unique features include methods of monitoring scorecards and deciding when to update them, as well as different applications of scoring, including direct marketing, profit scoring, tax inspection, prisoner release, and payment of fines.

• Preface
• Chapter 1: The History and Philosophy of Credit Scoring
• Chapter 2: The Practice of Credit Scoring
• Chapter 3: Common Methods for Building Scorecards
• Chapter 4: Alternative Methods of Building Scorecards
• Chapter 5: Survival Methods
• Chapter 6: Managing the Data in Scorecard Development
• Chapter 7: Behavioral Scoring
• Chapter 8: Measuring Scorecard Performance
• Chapter 9: Implementation and Areas of Application
• Chapter 10: Economic Issues
• Chapter 11: Capital Requirements and the Basel Accords
• Chapter 12: Securitization and the Subprime Mortgage Crisis
• Chapter 13: Variable Pricing and Risk-Based Pricing
• Bibliography
• Index