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Credit Scoring & Decision System

Is There a New Breed of Forward Looking Credit Bureau Solutions on the Horizon?

When asked what made him an outstanding hockey player Wayne Gretzky replied,” I skate where the puck is going, not where it has been”. Unlike today’s credit characteristics which are based upon an historical perspective of a consumer’s behavior, this new breed of credit characteristics anticipate future consumer credit profiles allowing lenders to tailor credit offerings and risk management strategies ... Read More »

Using Unreliable Data Won’t Help Credit Invisibles

American Banker recently published an Op-Ed from Jim Wehmann, head of FICO’s Scores business. In it, he delineates some of the risks associated with the approach being promoted by those claiming that tens of millions of previously “invisible” consumers can qualify for mortgages based on data that exists today in their credit bureau files. An important debate is occurring in the mortgage industry ... Read More »

U.S. Lenders Reluctant to Switch to Better Performing Credit Risk Scoring Models

For an industry that prides itself for being sophisticated with the use of data and advanced analytics adoption to new credit scoring systems is a slow and expensive process. According to VantageScore LLC, three recent independently conducted surveys http://www.vantagescore.com/news-story/140 suggest that slightly more than 50% of the lenders interviewed would consider switching from their existing credit scoring system to one ... Read More »

Would Time Series Credit Scores Add Value to Consumer Credit Reports?

Research results indicate that historical balance and credit limit amounts on consumer credit reports may significantly improve the performance of credit risk models. Initial analytic offerings involving this new information from U.S. Credit Reference Agencies (CRAs) appears to be focused on the “low hanging fruit” of improved credit scores and decision support rules. Hopefully, CRA resources are also investigating new ... Read More »

FICO Brings Self-Learning Analytics to Cyber Security

FICO leverages its patented fraud detection and streaming analytic technologies to detect cyber security threats as they occur FICO (NYSE: FICO) announced the availability of the FICO® Cyber Security Analytics solution. This solution leverages decades of research in streaming analytics technologies, as well as new advances in self-learning models, to detect emerging and evolving cyber threats in real time. “As ... Read More »

Velocity Credit Characteristics Expected to Significantly Improve Credit Models

In an independent study released by Capital Services, Sioux Falls SD performed in conjunction with South Dakota State University researchers concluded that enhanced time series information recently introduced by the leading U.S. credit bureaus will significantly improve credit scoring and decision support platforms across all aspects of the consumer credit lifecycle http://www.sdstate.edu/mathstat/upload/A-Credit-Evolution_ASMBI.pdf .  As a leading payment portfolio management and ... Read More »

FICO and TransUnion Renew Agreement to Provide FICO® Scores to U.S. Financial Institutions and Businesses

Long-term agreement gives lenders flexibility in making the best risk management decisions for their businesses FICO and TransUnion today announced a renewed multi-year agreement to provide FICO® Scores to the U.S. banking community. TransUnion will continue reselling FICO Scores and provide FICO access to its consumer data for the purposes of developing and marketing new analytics that will meet the changing requirements of businesses. As part ... Read More »

New Credit Bureau Data Content Challenges Today’s Analytic Approach

Chet Wiermanski, BIIA contributing editor, comments on the latest consumer credit bureau content challenges. Given the highly competitive nature of the U.S. credit reporting industry the three major national credit reporting agencies are constantly racing ahead to improve the quality of their data and solutions. The most recent enhancements released by the “Big Three” involves the introduction of a new ... Read More »

Creditscoring for Consumer Loans

Faster available – less delinquencies – lower costs – higher willingness to pay – more competition Studies have shown the benefits of credit scoring for consumer loans for the economy and consumers.  Within this context data protection regulations are particularly relevant. Creditreform Germany:  The assessment of the credit by professional credit scoring for consumer lending has positive effects on the ... Read More »

More Models, More Regulations, More at Stake

FICO’s Andrew Jennings comments in his recent Bankinganalyticsblog that to some degree, we’re living in a world where we are cursed with our own success. Financial institutions have seen tremendous benefits from analytics, and as a result, they are using predictive models on an increasingly broader scale, to measure capital reserve requirements and manage complex customer decisions. But as his ... Read More »

Equifax and Zementis Introduce Solution That Streamlines Deployment of Predictive Analytic Models

Equifax Inc. (NYSE:EFX) and Zementis, a leader in predictive analytic solutions, announced a new solution that will help banks, telecommunications and other companies reduce deployment time for predictive analytic models, resulting in reduced costs and improved profitability. Equifax will embed Zementis’ scoring engine, called ADAPA®, into its decision management platform, called InterConnect®, and fully adopt the Predictive Model Markup Language (PMML) ... Read More »

Credit Risk: What Really Influences a Credit Score?

It seems like a very straightforward question that deserves an equally straightforward answer, but the biggest credit-scoring question consumers want answered is anything but simplistic.  Consumers want to know, of course, “What influences my credit score?” The short answer is:  Your credit behaviors reflected in your credit files at the three largest credit reporting companies — Equifax, Experian and TransUnion ... Read More »

German Based Micro Lender Eyes Small Business Lending – Generates its Own Information

Kreditech, which was launched last year (see our report of November 2012) to provide small loans to consumers is said to be breaking into the small business lending market. At this point in time little is known about the announced B2B offering, except that it will launch internationally early in 2013 and will allow retailers (e.g. banks, leasing companies, e-commerce ... Read More »

BIG Data and Analytics Drives New Microfinance Venture in Germany

User generated data and big data combined is to create a new database on micro-borrowers.  “Scoring as a Service” API announced as a new vision! At the prestigious NOAH Conference for Internet entrepreneurs the audience was told that a German startup called Kreditech is cleaning up the European Payday Industry with a disruptive BIG Data based technology which reduces overdues ... Read More »