Book Chapter

Introduction

Siddiqi, Naeem

2017

Overview

This chapter presents an introduction to the book titled “Intelligent Credit Scoring: Building and Implementing Better Credit Risk Scorecards” by Naeem Siddiqi. The book presents a business‐focused process for the development and usage of credit risk prediction scorecards, one that builds on a solid foundation of statistics and data mining principles. The application of business intelligence to the scorecard development process, so that the development and implementation of scorecards is seen as an intelligent business solution to a business problem. Credit scoring is now also being used increasingly in the insurance sector for determining auto and home insurance premiums. A unique study conducted by the Federal Reserve Board even suggests that couples with higher credit scores tend to stay together longer. One factor that users of credit scoring will need to be cautious about is the increasing knowledge of credit scoring in the general population. The amount of confidence in any model or scorecard must be based on both the quality and quantity of the underlying data, and decision‐making strategies adjusted accordingly. Models are very useful when used judiciously, along with policy rules and judgment, recognizing both their strengths and weaknesses.

• Publisher: John Wiley & Sons, Inc
• Subject: credit risk prediction scorecards / decision‐making strategie / home insurance premiums / insurance sector / intelligent credit scoring
• ISBN: 1119279151, 9781119279150