Acceptance Scorecard

From Open Risk Manual

Definition

Acceptance Scorecard, also Application Scorecard is a type of Credit Scorecard that is used within a financial institution to adjudicate (decide) on whether or not to accept a new client.

Issues and Challenges

  • By construction the lender will have limited internal Risk Data about the potential client. This gap is closed by collecting data during the application process, both directly from the applicant and via external data sources
  • As rejected clients are (in principle) not monitored for credit history, the estimation is subject to a Selection Bias. The efforts aimed at mitigating this bias are termed Reject Inference

See Also

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