The use of credit scoring - the quantitative and statistical techniques to assess the credit risks involved in lending to consumers - has been one of the most successful if unsung applications of mathematics in business for the last fifty years. Now with lenders changing their objectives from minimising defaults to maximising profits, the saturation of the consumer credit market allowing borrowers to be more discriminating in their choice of which loans, mortgages and credit cards to use, and the Basel Accord banking regulations raising the profile of credit scoring within banks there are a number of challenges that require new models that use credit scores as inputs and extensions of the ideas in credit scoring. This book reviews the current methodology and measures used in credit scoring and then looks at the models that can be used to address these new challenges.

Preface; 1. Introduction to Consumer Credit an Credit Scoring; 2. Measurement of Scoring Systems; 3. Risk Based Pricing; 4. Profit Scoring and Dynamic Models; 5. Portfolio Credit Risk and the Basel Accord; Appendices; References; Index

, Lyn C. ThomasProfessor of Management Science, Quantitative Financial Risk Management Centre, University of Southampton