Credit models

Scorecards

Scorecard is a widely used model in the industry. Its development process is based on statistics, but its usage is easily understandable by non-technical workers. The folowing link is a blogpost explaining how to develop a scorecard model. Explainability is a key element in credit rating, since credit analysts need to explain to customers why their loan demand has been declined. Scorecards are easy to understand by all employees and executives and satisfy the explainability condition.