Statistical Classification Methods in Consumer Credit Scoring: a Review

Credit scoring is the term used to describe formal statistical methods used for classifying applicants for credit into 'good' and 'bad' risk classes. Such methods have become increasingly important with the dramatic growth in consumer credit in recent years. A wide range of stati...

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Bibliographic Details
Published in:Journal of the Royal Statistical Society. Series A, Statistics in society Statistics in society, 1997-01, Vol.160 (3), p.523-541
Main Authors: Hand, D. J., Henley, W. E.
Format: Article
Language:English
Subjects:
Applications
Bank credit
Bank loans
Biology, psychology, social sciences
Charge accounts
Classification
Classification methods
Consumer credit
Consumer loans
Consumers
Credit
Credit cards
Credit control
Credit risk
Credit scoring
Discriminant analysis
Exact sciences and technology
Finance
Financial institutions
Insurance, economics, finance
Judgement
Loans
Mathematics
Medical sciences
Mortgage loans
Multivariate analysis
Probability and statistics
Reject inference
Reliability, life testing, quality control
Risk
Risk assessment
Sciences and techniques of general use
Statistical analysis
Statistics
United Kingdom
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Summary:Credit scoring is the term used to describe formal statistical methods used for classifying applicants for credit into 'good' and 'bad' risk classes. Such methods have become increasingly important with the dramatic growth in consumer credit in recent years. A wide range of statistical methods has been applied, though the literature available to the public is limited for reasons of commercial confidentiality. Particular problems arising in the credit scoring context are examined and the statistical methods which have been applied are reviewed.
ISSN:0964-1998
1467-985X
DOI:10.1111/j.1467-985X.1997.00078.x