Good-Bad Definition
From Open Risk Manual
Definition
Good-Bad Definition is an important Credit Scorecard Design decision in the context of Credit Scorecard Development. It selects the appropriate observable variable to define "good" (performing, in good standing) versus "non-performing" (delinquent) creditors within a pool of historical observation data.
The selection is important because Creditworthiness is not a Binary Variable but spans a spectrum. Poor credit performance can manifest in a variety of credit events.
