Credit score thresholds as a source of inefficiency in lending processes

Eduard Inozemtsev and Andrei Simonov
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Eduard Inozemtsev: Gaidar Institute for Economic Policy
Andrei Simonov: Gaidar Institute for Economic Policy

Working Papers from Gaidar Institute for Economic Policy

Abstract: The increase in mortgage lending and the need to securitize and standardize mortgage debts creates a need to define rules for the application of individual household credit scores. Thresholds are widely used in mortgage lending, especially in large financial institutions. However, we know very little about how tamper-proof modern credit scoring methods are. We suggest looking into ways people can manipulate credit scores and suggesting ways that financial institutions can mitigate the problem.

Keywords: Russian economy; mortgage lending; mortgage debt; credit scoring (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2020, Revised 2020
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https://www.iep.ru/files/RePEc/gai/wpaper/wpaper-2022-1182.pdf Revised Version, 2023 (application/pdf)

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