credit scoring

Credit scoring

A statistical technique that combines several financial characteristics to form a single score to represent a customer's creditworthiness.

Credit Score

A measure of an individual's creditworthiness. Credit scoring involves the quantification of a variety of factors in an individual's background, including a history of default, the current amount of debt, and the length of time that the individual has made purchases on credit. Banks and other financial institutions may use a credit score to determine whether or not an individual is likely to default on a loan, mortgage, or other debt. The FICO score is the most common credit score in the United States.

credit scoring

see CREDIT RATING.

credit scoring

The process of rating potential borrowers based on their overall credit history, current debts, and frequency of application for credit.The most commonly used score, by far, is the FICO score.

References in periodicals archive ?
The Fair, Issac model has proved to be so popular that it is now regarded as the industry standard, although other companies use different forms of credit scoring, emphasizing different factors they regard as important.
In its most simple form, credit scoring can be defined as a technique that helps credit providers decide whether to grant credit to customers.
Releasing a Missouri Department of Insurance report that concludes insurers' use of credit scoring harms low-income and minority policyholders, Gov.
Insurance companies vary widely in whether, where, and the extent to which they use credit scoring. (1)
One technique that is rapidly gaining acceptance is credit scoring. Credit scoring is a statistical procedure that provides an estimate of default probability for individual loans, based on borrower and loan characteristics.
"As credit scoring gains relevance in the UAE, we want to educate and guide customers to help them better manage their finances today for a healthier financial future."
Roughly 7 million of these people are what credit scoring company FICO calls "credit retired." They no longer actively use credit, but their histories are free from charge offs, collections or other negative marks that might indicate that "their exit from the credit mainstream was involuntary," says Ethan Dornhelm, FICO's vice president for scores and predictive analytics.
"The launch of the Al Etihad Credit Bureau's credit scoring system is another major milestone in the evolution of the financial services industry in the country.
The credit scoring model that a lender uses must be able to leverage this data and we knew early on the predictive value of this information.
H This article discusses how credit scoring works, and redefines both a new way to measure risk and how risk shifts over time.
The tools enable members to access their credit scores, easily digest information on credit scoring, empower informed financial decisions, and put their credit to work to get the best products for their credit profile," the company said.