COLLECTIONS SCORING

ASSESSMENT OF DELINQUENT BORROWERS ON THE BASIS OF THEIR CREDIT HISTORY DATA

Collections scoring is an analytical tool for assessment of creditworthiness of a delinquent borrower on the basis of their credit history data. The result is produced in the form of a score.
The score value reflects the probability of the borrower’s default within the next 6 months for debts 1 to 30 days overdue. The scoring model is built using the logistic regression method. 

The service helps to achieve the following objectives:

  • Portfolio segmentation at the early delinquency stage for setting priorities and collections methods;
  • Forecasting the risk level and future retail portfolio provisions;

Advantages:

  • The scoring can be easily built in collections decisioning systems;
  • The niche model is more precise in differentiating delinquent borrowers;
  • The model is regularly enhanced and updated.

Peculiarities of the collections scoring:

  • The model was build using a population of borrowers with delinquency up to 30 days on at least one of their loans;
  • The goal variable is achieving 90-day delinquency within 6 months;
  • Default value -111 is not contemplated for borrowers currently 90 days overdue.

For optimum use of the service, it is expedient to utilize the Scoring at early stages of delinquency.