Scoring Models of Bank Credit Policy Management

Aida Hanic (), Emina Zunic and Adnan Dzelihodzic
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Aida Hanic: Institute of Economic Sciences, Belgrade, Serbias
Emina Zunic: International Burch University, Sarajevo
Adnan Dzelihodzic: International Burch University, Sarajevo

Economic Analysis, 2013, vol. 46, issue 1-2, 12-27

Abstract: The aim of this paper is to present how credit scoring models can be used in financial institutions, in this case in banks, in order to simplify credit lending. Unlike traditional models of credit analysis, scoring models provides valuation based on numerical score who represent clients’ possibility to fulfil their obligation. Using credit scoring models, bank can create a numerical snapshot of consumers risk profile. One of the most important characteristic of scoring models is objectivity where two clients with the same characteristics will have the same credit rating. This paper presents some of credit scoring models and the way that financial institutions use them

Keywords: Credit scoring; score; probability; risk; financial institutions (search for similar items in EconPapers)
JEL-codes: E51 G21 (search for similar items in EconPapers)
Date: 2013
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