List of Retail Credit Score Factors
Contents
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:
- National Identification Number
- Passport Number
- National Insurance Number
- National Tax Number
- 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
Link with Standardized Templates
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
Link with Standardized Templates
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
Link with Standardized Templates
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.
Link with Standardized Templates
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