Credit Scorecard Design
Credit Scorecard Design is the collection of internal processes that narrow down the options and possibilities around building and deploying a Credit Scorecard.
Such a design process is usually part of the initial phase of building a scorecard, after the broader context (including regulatory framework), business requirements and objectives, available resources and constraints have been clarified.
Elements that might be considered in this step are:
- The range and nature of Risk Data that will be the basis for the development and operation of the scorecard
- The overall Customer Segmentation and number of desired scorecards
- The range and nature of the Credit Scoring Models that will be explored, including potential Credit Scorecard Explainability requirements.
- The specification of certain key variables such as Good-Bad Definition, Outcome Period
- Criteria and strategies for monitoring scorecard performance
The design process is likely to be an element of a broader business project (New Financial Product, new market etc.) and thus it will follow the organizational and management principles of that project. It is likely to involve the iterative engagement of various stakeholders as the various objectives, options and constraints are converted into a concrete specification that is deemed adequate to guide the next steps
A set of recommendations (in the form of documentation)