Credit Scoring or Risk Rating - PowerPoint PPT Presentation

Credit scoring or risk rating
Download
1 / 3

  • 59 Views
  • Uploaded on
  • Presentation posted in: General

Credit Scoring or Risk Rating. Developed to assist lending institutions in credit management and risk assessment. A borrower’s risk lies in their overall repayment ability as it pertains to the probability of default or late payments. Advantages. Improved accuracy of loan classification

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.

Download Presentation

Credit Scoring or Risk Rating

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Credit scoring or risk rating

Credit Scoring or Risk Rating

  • Developed to assist lending institutions in credit management and risk assessment.

  • A borrower’s risk lies in their overall repayment ability as it pertains to the probability of default or late payments.


Advantages

Advantages

  • Improved accuracy of loan classification

  • More timely decisions can be made.

  • Bases for responding to competitive pressures via a risk rating system that is linked to a loan pricing system.

  • Opportunity to examine risk on terms consistent with the lenders profitability and growth goals.

  • Provides information to meet the needs of examines and regulators


Components in developing a credit scoring system

Components in Developing a Credit Scoring System

  • Personnel expertise

  • Time and resources available

  • Ability to automate

  • Amount and quality of information needed

  • Risk classification criteria

  • Weighting and scoring measures

  • Validation and documentation


  • Login