What are PEFINDO Credit Scoring & Scorecard Development? A Scorecard is a statistical model that predicts the behavior of individuals or the companies in the future, on the basis of information provided in the present. PEFINDO Scorecard uses mathematical formulas to transform all the relevant information of the scored subject into one number which predicts whether the individual or the company will be a good or a bad customer in the future. The credit scores are generated based on a statistical model that incorporates the information contained in the credit report. There are several different categories of information that are used, such as: payment history, high indebtedness, length of credit history and more. The advantages of credit scoring and scorecard development have proven to be enormous over time, benefiting lenders, consumers, and the economy itself. Credit scoring removes bias from the equation. Credit scoring’s empirical nature has the advantage of minimizing human bias. This is particularly important in a world where such accusations can cause huge public relations damage, or even lawsuits. Scorecard Benefits: * provide a consistent approach to credit decisions * scores are based on actual historical data and are not influenced by the biases and perceptions of individual underwriters * ensure there is no discrimination according to local laws * saves time in the evaluation process * provides instant, automated decisions * reduces costs – fewer people required in processing the credit application * statistical scoring can be tested before use * completely different people with the same score share the same risks * credit scoring saves your money
Posted on: Sun, 16 Nov 2014 07:05:19 +0000
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