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How To Improve Credit Risk Modeling For Better Credit Quality
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Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
10/31/2013 | 1:51:55 PM
re: How To Improve Credit Risk Modeling For Better Credit Quality
There are many types of data that companies are using to determine credit worthiness. It's well documented that insurers can use credit reports to determine the likelihood that a driver will get into an accident (a person with bad credit is more likely to get into accidents, or violate traffic laws). I'm sure banks can use other types of data to determine if someone is a good risk.
Byurcan
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Byurcan,
User Rank: Author
10/30/2013 | 11:54:28 AM
re: How To Improve Credit Risk Modeling For Better Credit Quality
Insurance companies can also use third-party data to root out fraud, correct?
ali15871
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ali15871,
User Rank: Apprentice
10/30/2013 | 3:49:30 AM
re: How To Improve Credit Risk Modeling For Better Credit Quality
It also includes the what kind of information required for analysis and source of information to evaluate the credit worthiness of borrower.
Nathan Golia
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Nathan Golia,
User Rank: Author
10/25/2013 | 7:57:24 PM
re: How To Improve Credit Risk Modeling For Better Credit Quality
Insurance companies are big on new third-party data sources because of their ability to make the transaction process quicker at the time of policy issuance Gă÷ things like prescription history, for example. I don't feel like banks have had the same issue with the user experience at the time of customer acquisition, but there are definitely options out there that could make it even sleeker and perhaps even be more predictive of the potential risk.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
10/23/2013 | 10:05:53 AM
re: How To Improve Credit Risk Modeling For Better Credit Quality
I think that banks are considering a number of non-traditional data sources to help determine credit, such as social data. However, i'm not sure how widespread it is and how much of that type of data has really made it into day-to-day analysis, or is still in the pilot phase.
Nathan Golia
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Nathan Golia,
User Rank: Author
10/22/2013 | 8:24:50 PM
re: How To Improve Credit Risk Modeling For Better Credit Quality
What about the potential for different data sources than the traditional ones in determining creditworthiness? Certainly there must be some options.
Greg MacSweeney
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Greg MacSweeney,
User Rank: Author
10/21/2013 | 10:31:06 AM
re: How To Improve Credit Risk Modeling For Better Credit Quality
The "annual reviews" and "trend analysis" seem to be the parts of a credit analysis process that are most lacking. There is a massive focus on credit worthiness at the beginning of the relationship, but I'm not sure how much ongoing analysis happens after a year or two. Granted, banks did a large sweeping review of existing mortgages 2-3 years after the credit crisis, but I doubt they have gone back again to do the same analysis. Am i wrong?
Byurcan
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Byurcan,
User Rank: Author
10/18/2013 | 6:13:15 PM
re: How To Improve Credit Risk Modeling For Better Credit Quality
Good credit risk modeling is especially important in the current regulatory environment, and the importance of Know Your Customer initiatives.


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