publication . Article . 2014

Using a transactor/revolver scorecard to make credit and pricing decisions

Hsin-Vonn Seow; Lyn Thomas; Christophe Mues; Mee Chi (Meko) So;
Open Access English
  • Published: 01 Mar 2014
  • Country: United Kingdom
Abstract
In consumer lending the traditional approach is to develop a credit scorecard which ranks borrowers according to their risk of defaulting. Bads have a high risk of default and Goods have a low risk. To maximise the profitability of credit card customers, a second classification between revolvers and transactors becomes important. Building a transactor/revolver scorecard together with a Good/Bad scorecard over the revolvers, gives rise to a risk decision system whose ranking of risk is comparable with the standard approach. The paper develops a profitability model of card users including the transactor/revolver score leads. This gives more accurate profitability ...
Subjects
free text keywords: Arts and Humanities (miscellaneous), Information Systems and Management, Management Information Systems, Developmental and Educational Psychology, Information Systems
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