Credit scorecard
A credit scorecard is a model that assigns points to characteristics of an applicant or account, then combines those points into a score that ranks credit risk. The score reflects the characteristics included in the scorecard and the points assigned to them.
Example
In an application scorecard, each characteristic bin contributes points. For illustration, age band (25), time at address (20) and recent searches (10) give an applicant a score of 55, compared with an illustrative cut-off of 50.
Building a scorecard from characteristics to points
Each characteristic is divided into bins, and each bin has points. The points for an applicant or account's characteristics are combined into a score.
A scorecard's points can be scaled from log odds. The point scale sets how changes in points relate to changes in the odds.
Monitoring scorecard performance and population stability
Compare current Gini and KS with development results, then check PSI in recent applications and bad rates across score bands.
A lender can review redevelopment when recent performance falls well below development results or PSI points to a substantial population shift. A policy revision or a change to the product or channel can also prompt that review.
Questions we get asked
How many characteristics does a typical credit scorecard use?
A typical scorecard has 8 to 15 characteristics. Each characteristic is divided into bins that carry points.
What is the difference between an application and a behavioural scorecard?
An application scorecard scores new applicants. A behavioural scorecard scores existing accounts based on their repayment behaviour.
How does a credit scorecard differ from a credit bureau score?
A bureau credit score is built by a credit bureau from bureau data for many lenders. A lender’s own scorecard is built from its applicants and outcomes, and can use application data the bureau does not have.
Decisimo's scorecard performance calculator calculates Gini, KS, PSI and bad rate by band from a CSV, and the file stays in your browser.
