Developments in consumer credit risk assessment

Crook, J.N., Edelman, D.B. and Thomas, L.C. (2006) Developments in consumer credit risk assessment. Southampton, UK, University of Southampton, 33pp. (Univeristy of Southampton Discussion Paper Series: Centre for Risk Research, CRR-06-09).


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Consumer credit risk assessment involves the use of risk assessment tools to manage a borrower’s account from the time of pre-screening a potential application through to the management of the account during its life and possible write-off. The riskiness of lending to a credit applicant is usually estimated using a logistic regression model though researchers have considered many other types of classifier and preliminary evidence suggest support vector machines seem to be the most accurate. The training of a classifier on a sample of accepted applicants rather than on a sample representative of the applicant population seems not to result in bias though it does result in difficulties in setting the cut off. Profit scoring is a promising line of research and the Basel 2 accord has had profound implications for the way in which credit applicants are assessed and bank policies adopted.

Item Type: Monograph (Discussion Paper)
ISSNs: 1356-3548 (print)
Related URLs:
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HF Commerce
H Social Sciences > HJ Public Finance
Divisions : University Structure - Pre August 2011 > School of Management
ePrint ID: 58374
Accepted Date and Publication Date:
Date Deposited: 15 Aug 2008
Last Modified: 31 Mar 2016 12:39

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