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Credit scoring is a special system to assess the potential customer for compliance of his creditworthiness with the terms of a specific credit product. The system consists of statistical data and takes into account large number of factors associated directly with the client, such as: "if the client is married," "how many dependent children are there", "high education", "type of business", "position" etc .

As you know, the essential factors based on which a quality scoring model operates are pretty dynamic so the model needs constant maintenance and updating. A significant data update in our economic situation should take place approximately every 2nd month and each year a complete revision of the scoring program should be made.

Credit scoring is necessary in order to protect a bank from unreliable clients, to simplify the process of credit review and underwriting as well as reduce personnel costs. Indeed, it could be much cheaper to hire credit agents who would be just entering data into the electronic form and send it to the scoring centre than pay highly skilled credit experts for calculation of customers’ creditworthiness "by hand".

It should be noted that recently the use of scoring programs is appropriate only for unsecured loans or lending small amounts to individuals. In lending on real estate or manufacturing facilities use of scoring model is highly inefficient as the client’s ownership of valuable property or rights to such property as well as his reputation play a key role in making the decision on lending. Such applications should be reviewed by qualified credit staff or credit committees.

If you are interested in the programs on basics of credit scoring, please call +7 (812) 498 65 80.

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