Trends in Credit Scoring and Model Development
New Mercator Advisory Service report explores scoring products and emerging modeling techniques
Boston, MA - April 4, 2013. A
report by Mercator Advisory Group presents research that will help
payments industry participants understand the basics of credit scoring
and scoring model development, as well as the best practices and
evolving methods being used by lenders and scoring vendors for
deployment of scoring products.
Mercator Advisory Group's new report, Trends in Credit Scoring and Model Development, also examines
market dynamics that have impacted credit risk in the U.S. over the
last five years and the ways these shifts have impacted consumer credit
ubiquity of credit scores and the relative obscurity of the processes
that determine those scores is one of the more intriguing juxtapositions
in the financial world. Though many consumers in the "banked"
population in the U.S. can recite their credit scores from memory due to
the broader access that credit bureaus have granted in recent years,
probably only those who work in statistical science could take a
meaningful stab at how each score is really determined," David Fish, senior analyst in Mercator Advisory Group's Fraud, Risk, and Analytics Advisory Service and author of the report
comments. "Furthermore, lenders tend to develop and utilize custom
scoring models and scorecards for nearly every distinct product line,
further distancing credit decisioning data from the credit bureau
information that consumers can access directly. For the
financial institutions that employ either custom or generic credit
scoring models for credit decisions, evolving regulations require a new
level of transparency that the old "black box" approach to credit
scoring can no longer satisfy."
Highlights of this report include:
- An overview of the credit scoring model development and implementation life cycle
- A review of the credit scoring products available for use by participants in the payments industry
- Discussion of trends in consumer credit and credit scores in the United States
- Commentary on expanding regulatory oversight of credit reporting agencies and scoring model owners
of best practices and evolving methods for credit scoring and using
credit scores, as well as supplemental and alternative data, in lending
One of the eight exhibits in the report:
This report is 20 pages long and has eight exhibits.
Companies mentioned in this report include:
1010 Data, ARGO, Certegy Check Services, Chex Systems, Clarity
Services, CoreLogic, DataX, Dun & Bradstreet, Early Warning
Services, Equifax, Experian, Factro Trust, FICO, IBM SPSS, ID Analytics,
Innovis, LC2, LexisNexis, Marketing Associates, Microbilt, SAS, Scoring
Solutions, Telecheck, TransUnion, VantageScore, and Zoot Enterprises.
Members of Mercator Advisory Group Credit Advisory Service and Fraud, Risk, and Analytics Service
have access to this report as well as the upcoming research for the
year ahead, presentations, analyst access, and other membership
benefits. Please visit us online at www.mercatoradvisorygroup.com.
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About Mercator Advisory Group
Mercator Advisory Group
is the leading, independent research and advisory services firm
exclusively focused on the payments and banking industries. We deliver
pragmatic and timely research and advice designed to help our clients
uncover the most lucrative opportunities to maximize revenue growth and
contain costs. Our clients range from the world's largest payment
issuers, acquirers, processors, merchants and associations to leading
technology providers and investors. Mercator Advisory Group is also the
publisher of the online payments and banking news and information