List of Retail Credit Score Factors

List of Retail Credit Score Factors

A list indicative list of factors that have been discussed in the literature along with references to standardized Retail Credit Data tables that can be used for their construction.

Identification

Identification typically means a relevant subset of the Personal Data of a Natural Person that serves the purpose of uniquely identifying that individual, in particular for legal purposes. The precise requirement depends on context and applicable/available ID (Identity Document) and may be provided via unique keys such as:

1. National Identification Number
2. Passport Number
3. National Insurance Number
4. National Tax Number
5. Drivers License Identifier

Alternatively, identification may be provided via a combination of (verified) combinations of Name, Birth Date and/or Physical Address

Impact on Credit Risk

NB The identity key in itself does not hold credit risk relevant information (is not a credit score factor) but it may provide links to other data that do so.

Link with Standardized Templates

Field	Type	Definition
Name of Counterparty	Text	Name used to refer to the Counterparty
Date of Birth	Date	Date of birth of the Private Individual Counterparty
Personal Identity Number	Text	Unique external identifier assigned to the Private Individual Counterparty
Type of Personal Identity Number	Choice	Type of the personal identity number entered in field "Personal Identity Number", e.g. National Insurance Number, Passport Number, National Tax Number
Address of Residence	Text	Street address where the Private Individual Counterparty lives, including flat / house number

Demographic Data

Demographic Data is information that is typically collected in a Census or population survey that aims to create a statistical profile of a given population. The attributes collected in such surveys are generally arbitrary (reflecting what aspects are considered important in a given culture). Typical examples include:

• Age / Birth Date
• Race
• Population Group (Ethnicity)
• Address Location (Geography, City, Neighborhod)
• Educational Level
• Occupation Type

Impact on Credit Risk

Demographic Data do not have a-priory given impact on credit worthiness. (See Algorithmic Bias)

Link with Standardized Templates

Field	Type	Definition
Date of Birth	Date	Date of birth of the Private Individual Counterparty
Nationality of Counterparty	Choice	Main nationality of the Private Individual Counterparty
Address of Residence	Text	Street address where the Private Individual Counterparty lives, including flat / house number
City of Residence	Choice	City where the Private Individual Counterparty lives
Geographic Region of Residence	Choice	Province / Region where the Private Individual Counterparty lives
Geographic Region Classification	Choice	NUTS3 classification used for the field "Geographic Region of Residence", i.e. NUTS3 2013 (1), NUTS3 2010 (2), NUTS3 2006 (3), NUTS3 2003 (4), Other (5)
Postcode of Residence	Text	Postcode where the Private Individual Counterparty lives
Country of Residence	Choice	Country where the Private Individual Counterparty resides
Occupation Type	Choice	Main occupation of the Private Individual Counterparty, where (a), (b), (c) or (d) is selected in the field 'Employment Status'
Occupation Description	Text	Description of the occupation of the Private Individual Counterparty, providing more detail for field "Occupation Type"

Demographic data tend to be fairly fairly static in nature

Employment Track Record

The Employment Track Record involves data that establish that employment track record. For example:

• Employment Status
• Total Length of Employment
• Time in Current Occupation
• Frequency of Employment Changes

Impact on Credit Risk

The employment track record does not have a-priory given impact on credit worthiness. (See Algorithmic Bias)

Link with Standardized Templates

Field	Type	Definition
Employment Status	Choice	Employment status of the Private Individual Counterparty

Income Based Factors

Data about income and expenses is extracted from accounts and product information and typically (but not necessarily) converted into ratios such as Debt to Income Ratio

• Earnings: salaries, other sources of income

Impact on Credit Risk

A common assumption is that (other things being equal) higher income implies less credit risk

Link with Standardized Templates

EBA Data

Field	Type	Definition
Annual Income	Number	Total annual income of the Private Individual Counterparty
Currency of Annual Income	Choice	Currency that the annual income of the Private Individual Counterparty is expressed in
Income Self-Certified	Boolean	Indicator as to whether the Private Individual Counterparty has self-certified their annual income

ESMA Data (Credit Cards and Consumer Loans)

Field	Type	Definition
ESMA Credit Cards.Exposures.Primary Income	MONETARY	Primary obligor annual income used to underwrite the underlying exposure at the time of origination. Where the primary obligor is a legal person/entity, enter in that obligor’s annual revenue. Include the currency in which the amount is denominated, using {CURRENCYCODE_3} format.
ESMA Credit Cards.Exposures.Primary Income Type	LIST	Indicate what income in CCDL14 is displayed
ESMA Credit Cards.Exposures.Primary Income Currency	CURRENCYCODE_3	Currency in which the primary obligor's income or revenue is paid.
ESMA Credit Cards.Exposures.Primary Income Verification	LIST	Primary Income Verification

Expense Based Factors

• Dependents
• Interest Expense
• Other Borrowings

Impact on Credit Risk

A common assumption is that (other things being equal) higher expenses implies more credit risk

Asset Based Factors

Asset Based Factors are all those factors capturing the various types of private property / assets that an individual may possess

• Residency Type: Rent versus Ownership
• Solvency: The Household Asset Base

Impact on Credit Risk

A common assumption is that (other things being equal) a higher asset base implies less credit risk

Product Factors

• Loan Amount
• Loan Duration
• Use of Funds / Purpose of Lending
• Collateral
• Guarantees

Impact on Credit Risk

Product factors can have significant impact on credit risk, either directly or indirecty. For example:

• the interest rate may form an important input to a household's expenses
• the loan duration increases the likelihood of an eventual event
• the presence or not of collateral influences both borrower behavior and losses in case of default

Internal Behavioural Data

• Other Accounts
• Number and size of transactions
• Maximum/ minimum balances, Variances
• Length of the relationship, past litigation
• Violation of credit lines

Impact on Credit Risk

Behavioural factors cover diverse aspects and do not always have a fixed relationship with credit risk.

Externally Sourced Information

Acquired from credit bureaus, Credit Referencing agencies

• Addresses
• Court judgements
• Payment histories

Impact on Credit Risk

Externally sourced information is not a new risk factor class per-se, rather a mechanism for covering potential information gaps

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