Credit Scoring And Scoring Models And Systems

Many banks take for a basis scoring models based on the statistican of neighboring countries. Whether these models under our conditions can work effectively?

It is possible to use the models close to this market, having taken into consideration all local features. A difference between the national borrowers and borrowers from other European countries is in responsibility. Some take the big credits, not especially reflecting on the future. Though people want everywhere to improve their quality of life using the proper borrowing. But the mentality everywhere quickly changes. Our parents before the big purchasings saved money, but now everybody want to have anything right now and to pay for it later.

This market also differs from others deficit of statistical data. AS in some countries there is higher level of credit swindle. One more local nuance which isn’t pleasant to banks is availability at citizens of informal incomes. In such conditions monetary institutions can’t use pure scoring and at decision making are forced to involve the human factor. Simply having entered the data about the client into the computer, the bank hardly will receive its interesting result.

Whether it is necessary to banks to rely on scoring systems, especially if they don’t have enough of credit histories?

In retail it is necessary to use mathematical and statistical techniques and manage a portfolio, instead of individual credits. The task of progressive retail bank is to replace credit committee with the mechanism which will allow making quickly decisions. For the client are not interesting the internal procedures of financial organization, for him the result and time which he will spend in bank are important. The bank aimed at issue of millions of credit cards and hundreds thousands of consumer loans, and for it it is necessary to have sound scoring mechanism. Manually it is impossible to process every day ten thousand of requests. We can long argue, whether scoring models are fair in relation to certain clients, but they are not bad.

How to create qualitative scoring model?

There are two approaches. At first it is necessary to win the market, having offered mass products and only then to start to debug scoring system. Usually large players resort to this approach. Small and average operators prefer to act carefully. Only having adjusted scoring, they start to advance more actively the products in weights. Earlier I worked in more developed market, therefore processes occurring here to me aren’t always clear. In the growing market it is possible to spend millions dollars for marketing and advertising to involve people in products or to lead loyal credit policy and with its help to win clients. But it too will manage in millions dollars. Many players prefer the second variant. They easily lend money, knowing that many credits won’t be returned. In more developed markets such thing is impossible.

Do you still remember those good times when everybody could take a loan if one required funds? And just imagine the condition of those who must carry that burden nowadays when the economy is facing hard times. And for those people having credits the matter of credit monitoring is as crucial now as never before. It is not only about loan monitoring, this also allows to save money, time, and nerves and be fast in solving loan related issues. Those who are searching for a place where to find out about credit reports, are welcomed to check out this credit report monitoring site – there is much information about loan monitoring and how to order that service.

In addition we haven’t forget about possibilities given to us by digital technologies. The online network provides us with a really unique opportunity to find what we want or to obtain anything on the best terms which are available on the market.

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