A Comparison of a Credit Scoring Model with a Credit Performance Model |
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| Authors: | J.N. Crook R. Hamilton L.C. Thomas |
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| Affiliation: | 1. Department of Business Studies , University of Edinburgh , UK;2. Loughborough University Business School , University of Loughborough , UK |
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| Abstract: | Credit suppliers are interested in trying to predict which applicants are likely to default on repayments. They are also interested in predicting those who may miss one or two repayments rather than default by missing three. By considering a sample of 1001 bank credit card holders, this article compares those characteristics of borrowers which distinguish between (a) those who (in the sample period) never missed a repayment (‘goods') and those who missed at least one (‘slows'); (b) those who never missed a repayment and those who missed three consecutively (‘defaulters'); and (c) those who missed one or two repayments (‘bads') and those who missed three in succession. |
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