Radix Analytics Pvt Ltd

Issues & Objectives

  • Application scorecard for sub-prime customers
  • Review and recalibrate scorecard

  • Use insight data to improve alignment between underwriting rules and scores

Challenges

  • Methodology for current scorecard not well documented

  • Scores not aligned with underwriting rules

  • Data in batches – Credit history, product information, loan terms in different files from different time periods

  • Performance available only for 8% TTD population who take up loan from 55% approval

Project information

Skills

Advanced Statistical Techniques  

Client

Auto Loan Provider

Domain

Credit Scoring

Location

UK

Solution

  • Data collation to align all variables from same time-period was carried out using R for analysis

  • Customers classification using domain knowledge and statistical methods – Decision tree and cluster analysis.

  • Multiple scorecards each with superior performance than existing scorecard

  • All scorecards rescaled to have similar odds

  • Scorecard as a linear function for easy integration with loan origination system

  • Reviewed underwriting rule and corporate reporting system and recommended changes