Find the most profitable credit score cut-off
Enter your score bands, the profit on a good loan and the loss on a bad loan. See the most profitable cut-off and the price of a bad-rate ceiling in a minute.
Most profitable cut-off
A band with a bad rate above 15.7% loses money when approved.
Keeping the approved bad rate under 3.0% means a cut-off of 602. It earns €94,060 less than the most profitable cut-off.
Profit by cut-off
Cut-off results
| Cut-off | Good loans | Bad loans | Band bad rate | Approved | Approved bad rate | Profit |
|---|---|---|---|---|---|---|
| 300 | 203 | 294 | 59.2% Loses money | 100.0% | 14.6% | €84,880 |
| 488 | 330 | 160 | 32.7% Loses money | 90.1% | 9.7% | €443,700 |
| 527 | 386 | 110 | 22.2% Loses money | 80.3% | 6.9% | €581,900 |
| 555 Best | 440 | 60 | 12.0% | 70.3% | 4.8% | €635,540 |
| 579 | 471 | 42 | 8.2% | 60.3% | 3.6% | €605,140 |
| 602 Ceiling | 467 | 23 | 4.7% | 50.1% | 2.6% | €541,480 |
| 622 | 487 | 18 | 3.6% | 40.3% | 2.1% | €452,260 |
| 646 | 481 | 21 | 4.2% | 30.2% | 1.7% | €350,840 |
| 672 | 504 | 3 | 0.6% | 20.1% | 0.4% | €255,180 |
| 710 | 499 | 1 | 0.2% | 10.0% | 0.2% | €128,340 |
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The chosen cut-off is where the next decision starts. Run it as the live credit decision and test it first on past applications. Start free
Show formulas
Approved = (Good loans + Bad loans) ≥ Cut-off ÷ (Good loans + Bad loans) Approved bad rate = Bad loans ≥ Cut-off ÷ (Good loans + Bad loans) ≥ Cut-off Profit = Good loans ≥ Cut-off × Profit per good loan − Bad loans ≥ Cut-off × Loss per bad loan Most profitable cut-off = max ( Profit ) Break-even bad rate = Profit per good loan ÷ ( Profit per good loan + Loss per bad loan )
A cut-off at a band’s start approves that band and every band above it. Profit per loan is the same in every band here, so this leaves out pricing by band and loan size.
How to set a credit score cut-off
A credit score cut-off is the band start where approval begins. This tool compares each possible cut-off using the good loans and bad loans in the bands, plus the profit on a good loan and loss on a bad loan.
The most profitable cut-off is the one with the highest profit across the loans in the table. Set an approved bad-rate ceiling to see the lowest cut-off that meets it and the profit given up.
Cut-off questions
How do I set a credit score cut-off?
Enter the score bands with their good and bad loan counts. The tool tests each band start as a cut-off and shows the approved bad rate and profit.
How do I find the most profitable credit score cut-off?
For each possible cut-off, profit is good loans approved multiplied by profit per good loan, less bad loans approved multiplied by loss per bad loan. The tool marks the cut-off with the highest profit.
What is a break-even bad rate?
The break-even bad rate is profit divided by profit plus loss. A band with its own bad rate above this rate loses money when approved.
What does capping the bad rate of approved loans cost?
Set the approved bad-rate ceiling to see the lowest cut-off that meets it. The tool shows how much profit that cut-off gives up compared with the most profitable cut-off.
What happens if no cut-off meets the bad-rate ceiling?
The tool says so when no cut-off keeps the approved bad rate under the ceiling. You can then change the ceiling or review the score bands.