With the growing concern about personal bankruptcy and quality of consumer lending, an effective credit scoring system is crucial to efficient and profitable lending practices. Featuring essays from seven experts in the risk management and banking/financial institution lending environment, this unique book offers valuable insights and proven techniques for developing effective credit scoring systems. It provides in-depth coverage of the roles of credit scoring, generic vs. customized scoring models, credit bureau data, scorecard development, performance measures, neural networks, project management, scorecard monitoring reports, how to use a scorecard to a lender's best advantage and much more.



Contents:

Part One. Introduction

1. The Role of credit scores in consumer lending today by Elizabeth Mays

2. Generic and customized scoring models : a comparison by Gary Chandler

3. Credit bureau data : the foundation for decision making by Rhonda Sicilia'



Part Two. Model development and validation

4. Scorecard development by Elizabeth Mays

5. Variable analysis and reduction by Elizabeth Mays and Jean Yuan

6. Scorecard performance measures by Elizabeth Mays

7. Understanding the KS statistic by Elizabeth Mays

8. Score based loss forecasting models by Elizabeth Mays

9. Impact of indeterminate performance exclusions on credit score model developmeny by Mark Beardsell

10. Credit scoring and the fair lending issue of disparate impact by Michel LaCour Little and Elaine Fortowsky



Part Three. Score implementation, monitoring, and management

11. How to successfully manage a credit score development project by Dana Wiklund

12. Scorecard policies : how to use your scorecard to your best advantage by Elizabeth Mays

13. Scorecard monitoring reports by Elizabeth Mays and Phil Nuetzel

14. Credit scoring and risk based pricing : an income statement approach by Dana Wiklund



About the Author

Elizabeth Mays is the Director of the Retail Risk Modeling and Analytics Division for Bank One. She is a co-author of Interest Rate Risk Models: Theory and Practice (Glenlake Publishing, 1996), and is the author of Credit risk Modeling: Design and Applications (Glenlake Publishing 1999).