Is Your Credit Scoring Model Up to Speed?
Posted 09/17/09
How Good is Your Scoring Model? is the latest Foundation research project available to industry leaders. This report is for anyone in the industry seeking to determine whether credit scoring techniques are being used to their best advantage within companies and to help determine if there is an over-reliance on automated scoring models as opposed to human judgment, in the industry at large.
Developed by PredictiveMetrics, Inc., the survey examines trends, practices and controls in order to either refute or confirm whether potential exposures exist within the equipment leasing and finance industry and, thereby, recommend where attention may be warranted both now and in the future.The Foundation survey also set out to determine how credit scoring models are affecting decision-making, and whether the current economic downturn has had an impact on the predictive capacity of these scoring models.
Additionally, the survey report provides:
- a general review of model usage;
- specific analysis of the use of statistical-based and judgmental-based models;
- analysis of the impact of current economic conditions on model usage and other factors that are affecting model performance and scope of usage;
- Review and evaluation of the various data sources that are most commonly used in credit scoring models; and
- a summary and suggestions for future industry attention.
Nearly 78% of the companies that responded to the survey reported using some form of credit scoring model. However, there was a strong indication from respondents that the downturn in the economy has and will produce a significant increase in manual review of model results. This was underscored by the fact that almost 66 percent of the companies’ feel that their model results have been affected by the current economic conditions and 96.3 percent believe that the models are less accurate.
Foundation contributors receive the study at no charge; non-donors may obtain a copy for $300. Visit the Foundation store to download a copy today.
Sites of Reference:
http://www.store.leasefoundation.org/product/credit_scoring_model_/
