Credit Scoring


Credit Scoring

A statistical analysis performed by lenders and financial institutions to access a person's credit worthiness. Lenders use credit scoring, among other things, to arrive at a decision on whether to extend credit. A person's credit score is a number between 300 and 850, 850 being the highest credit rating possible.

Fair Isaac Corporation's credit scoring system, known as a FICO score, is the most widely used credit scoring system in the financial industry. Lenders use credit scoring in risk-based pricing in which the terms of a loan, including the interest rate, offered to borrowers are based on the probability of repayment. In general, the better a person's credit score, the better the rate offered to the individual by the financial institution.


Investment dictionary. . 2012.

Look at other dictionaries:

  • credit scoring — noun 1. The calculation of a person s credit rating by adding up points awarded according to the person s age, marital status, occupation, address, etc 2. A similar process used to calculate the creditworthiness of a business organization • • •… …   Useful english dictionary

  • Credit scoring — A statistical technique wherein several financial characteristics are combined to form a single score to represent a customer s creditworthiness. The New York Times Financial Glossary * * * credit scoring ˈcredit ˌscoring noun [uncountable]… …   Financial and business terms

  • credit scoring — A statistical technique that combines several financial characteristics to form a single score to represent a customer s creditworthiness. Bloomberg Financial Dictionary * * * credit scoring ˈcredit ˌscoring noun [uncountable] BANKING ECONOMICS… …   Financial and business terms

  • Credit scoring — Évaluation des risques clients Pour les articles homonymes, voir Évaluation et scoring. L’évaluation des risques clients (credit scoring en anglais) désigne un ensemble d´outils financiers d’aide à la décision utilisés pour évaluer… …   Wikipédia en Français

  • credit scoring —  Computerized method of rating a consumer’s credit worthiness based on income, past credit experience, and debt.  ► “Credit scoring attempts to quantify in a single number, the likelihood a potential borrower will repay his loan.” (Forbes, Dec.… …   American business jargon

  • credit scoring — / kredɪt ˌskɔ:rɪŋ/ noun a calculation made when assessing the creditworthiness of someone or something …   Marketing dictionary in english

  • credit scoring — / kredɪt ˌskɔ:rɪŋ/ noun a calculation made when assessing the creditworthiness of someone or something …   Dictionary of banking and finance

  • credit scoring system — A statistical system used to determine whether or not to grant credit by assigning numerical scores to various characteristics related to creditworthiness. American Banker Glossary …   Financial and business terms

  • Credit-Scoring-Verfahren — mathematisch statistisch fundiertes Verfahren zur ⇡ Kreditwürdigkeitsprüfung und Risikofrüherkennung im Kreditgeschäft; angewandt im Konsumenten und im Unternehmenskreditgeschäft. Es werden die Unterschiede zwischen guten und schlechten… …   Lexikon der Economics

  • Credit scorecards — are mathematical models which attempt to provide a quantitative estimate of the probability that a customer will display a defined behavior (e.g. loan default, bankruptcy or a lower level of delinquency) with respect to their current or proposed… …   Wikipedia