Credit Scoring

 

Whilst a comprehensive risk strategy is considered fundamental to the success of a lending operation, two of its key components, a scorecard and credit bureau data, have tended to become nothing more than commodity purchases.  Whilst credit bureaux have tackled this by charging a premium for value added products, many scorecard suppliers have merely accepted this fate and have been forced to make development efficiencies through the adoption of standardised routines, with the effect that the development process has become little more than a ‘turn-key’ operation.

This approach can mean enormous sacrifices as:

  • In-depth understanding and exploration of the data
  • Imaginative and innovative generation of derived criteria
  • The assessment of the profile of ”lost” applications and what effect they might have on the development process
  • The provision of a strategy for how the scorecard may be used to shape product offerings and set lending limits rather than providing just a simple cut-off

must all be lost to the status of ‘commodity’.

DecisionMetrics do not build commodity scorecards. 

We undertake analytical projects for clients that are specific to the current needs of that client, utilising the data that is available and aimed solely to address the business need. This may result in the development of a scoring solution, however, it may only require the implementation of a simple rules based solution with improved data capture to allow the future development of an improved solution.

We are not a solely analytical / mathematical based consultancy who only look to maximise the, never realised, predictive power of the model.  We differentiate ourselves by the approach we take to the whole development process, applying practical lender-based experience throughout the development and implementation process.

There are four key ingredients to the successful development and implementation of a credit scorecard:

  • The model development
  • The clients understanding of its benefits and limitations
  • The credit strategy built round the scorecard
  • The practical assessment of what is possible and desirable at each stage. 

We address all four of these areas.