Using a transactor/revolver scorecard to make credit and pricing decisions
We develop an approach to estimate credit customers' profitability and default risk. We build a transactor/revolver scorecard and Good/Bad scorecard over the revolvers. We compare this approach with the standard approach in credit scoring. Results show that our approach is similar to the standard method in predicting default. Results indicate that our approach is more accurate in estimating profitability.
pricing credit scoring risk decision analysis