Credit scoring: big opportunities for small and start-up businesses
Article Abstract:
Credit managers should consider marketing their services to small businesses. This sector is a highly attractive target because small businesses have a strong market share and growth rate, need services and financing, and are willing to pay. To minimize their risk when dealing with small businesses and startup businesses, credit managers may consider using the credit scoring decision systems. These are statistical models that can predict the probability that a firm will pay its bills in a highly delinquent fashion, that is, more than 90 days after the deadline. These credit scoring decision systems help credits managers better handle their portfolio risk, minimize their operating costs and introduce consistent credit decision systems and credit policies across different locations and personnel. The four types of credit scoring systems are discussed.
Publication Name: Credit World
Subject: Banking, finance and accounting industries
ISSN: 0011-1074
Year: 1995
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Credit scoring digs deeper into data: creditors enjoying broader decision support
Article Abstract:
Credit scoring is a highly effective tool that financial lenders and issuers can use to more accurately identify good prospects and accounts. Given that credit scoring developers have analyzed data more deeply, the predictiveness of these credit scoring models have become increasingly accurate. In fact, credit scoring is now specific to types of lending and the outcome it is predicting. Examples of tailored risk scores being offered by credit bureaus are industry option scorecards, mortgage scorecards, industry-specific pooled-data scorecards, and small business pooled-data scorecards. Credit scores are also available for identifying revenue generators, retaining accounts and maximizing collections. Creditors who use these scores are bound to gain a competitive edge over those who do not.
Publication Name: Credit World
Subject: Banking, finance and accounting industries
ISSN: 0011-1074
Year: 1996
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Credit bureau point scoring sheds light on shades of gray
Article Abstract:
Credit bureau point-scoring systems have refined consumer credit evaluations by introducing effective control factors into the credit grantor's decision-making process. Point scoring is based on algorithms used to calculate the risk of lending. The benefits to grantors by the system include greater control over credit decisions; more accurate setting of risk levels; and more consistent credit policies. The purposes for which point-scoring systems are being used include identifying risk potential prior to solicitation; reviewing selected accounts in a creditor's existing portfolio; and programming scoring systems into lender's online reporting service so any report obtained automatically includes applicants' scores.
Publication Name: Credit World
Subject: Banking, finance and accounting industries
ISSN: 0011-1074
Year: 1990
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