The so-called credit scoring system assesses a person’s creditworthiness and credit risks, based on numerical statistical methods. This technology is often used in fast lending for small amounts, when registering consumer express loans in real stores by credit companies, in the business of mobile operators or insurance companies.
Scoring is the assignment of points by filling out a certain questionnaire developed by credit risk assessors. Based on the results of the points gained, the system automatically decides to approve or refuse to issue a loan.
Benefits for the company
Having access to a larger volume of customer data, banks with AI-based credit scoring can provide credit to people who wouldn’t otherwise have access to it.
With Risk Modeling, institutions are able to analyze the default rate and develop strategies to reinforce their lending schemes
Type of expertise/ AI domain
Internal data required
Credit Score, personal information, digital footprint
External data possible
FICO, Experian, TransUnion/Equifax