Credit Scoring System

From Open Risk Manual

Definition

A Credit Scoring System is the set of tools and methodologies that assist with the creation of Credit Risk metrics (for example in the form of Credit Scoring), which in turn assist with the Risk Management of credit portfolios. The objective or a scoring system is to rank borrowers systematically with meaningful credit risk quality differentiation.

Components

A credit scoring system will include a number of components depending on the complexity and scope of its application. For example:

Institutions must have specific definitions, processes and criteria for assigning exposures to credit scores

See Also

References



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