Over the last few decades, Credit scoring has emerged as an effective tool, which facilitates lenders in assessing the creditworthiness of customers and determining the future risk of sanctioning credit based on their past record. Banks and financial institutions have been using credit scores in their credit-deciding process. Of late, the scope of credit scoring has expanded widely and is now increasingly used by telecom companies, utility service providers, insurers and Government agencies. Employers are also making use of credit scores in the hiring process. Traditionally, lending institutions have relied heavily on the judgement and opinion of loan officers. Credit scoring involves use of statistical techniques and models to analyze factors such as past payment history, amount outstanding, length of credit history and types of credit accounts held by customers. As such, it provides opportunity for more accurate assessment of the creditworthiness of the prospective and existing customers. It facilitates companies in swift disposal of applications and helps in devising effective collection strategies. This book is an interesting collection of articles providing insights into the concept, models and perspectives on credit scoring.
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