QUOTE(kenshin1 @ Oct 10 2011, 11:50 PM)
everybody still asking wat is scoring.....it's like a scoring board... but make it simple... most scoring problem...CCRIS....
overdue date... got 1 = cut score...1 more 1= cut more score.... got 2 sure reject.... (but some others that u hv 1 already reject)
card outstanding... >50% >70% >90% overlimit....over limit sure reject ...>90% most of the banks rej....
so...sometimes u get rejected due to FAILED SCORE/LOW SCORING...this is the meaning...ccris sucks
*applied too much card/ploan application 6mth b4 this...some banks also rej this for scoring too...
understand???
Your statement shows the lack of understanding on scoring methodologies as well as characteristic used for a score card.
Before everyone get's confused, the term scoring is not widely used in Malaysia yet. Not every banks in Malaysia has credit scoring as a baseline for approving loans. Even when some banks do have some sort of methodology to do scores it doesn't mean that it will be applied to all products. Most would have a score card for Credit Cards as a qualifier to weight whether to approve or rejects but not necessary for the other loan products. Reason being to develop a score card, one needs a sound historical data for calculating statistics and probability of accounts going bad. Why credit cards is more widely used is because most banks has a large base of credit cards thus justifiable for using a score card as a qualifier and more statistics ti drill down.
However personal loans is still considered young in the market and the base is also considered small to most banks. Thus most banks I knew of doesn't really have scoring applications to qualify customers. Even if they do, a lot would still by pass the score parameters and do judgmental approval instead.
And no - scoring is not based on "if fail this, cut 1 mark, fail that, cut 1 mark". To keep it simple it's more like if I pass this I would have "X" score, if I pass another criteria I would have "Y" score etc... and the score adds up to see whether or not you pass. Like taking an exam.
However, it's not a simple objective exam where correct is 1 mark and wrong is 0 marks. It's more towards a subjective type of exam. To illustrate, let's take payment in arrears as most banks would definitely looks at it. So if one person has 0 payments in arrears, meaning prompt paymaster; he would get full mark for that say 10 is the full mark. If he missed 1 payment, then maybe the mark would become marginally lower e.g. 8. If missed 2 payments, eg his marks might go down to 4. And if he missed 3 and above; maybe the score is 0 for that criteria. Thus it's not the logical I fail this, cut 1 mark; fail another level, cut 1 mark. The level of how the marks are arrived at depends on statistical analysis, thus like my example; if we want to use the "cut" methodology, then it's 1st level cut 2 points, 2nd level cut 4 points etc....
Take another example. i.e. Income. If income is above RM10k per month, say 10 point full mark. If income is between 9k to 10k then 9 points, if income is between 8k-9k then 8 points...However if income is below the threshold set by the bank say RM1.5k then it would be an outright reject which doesn't even go through score.
In our local context, scoring looks at customer's demographic as well as customer's bureau details. In more advance country like US, there is a credit bureau score widely available to the banks which they can use as another layer for approvals besides looking at own internal scores based on customer's demographic. In countries like Hong Kong and Australia where bankruptcy is high, there's even score developed to predict probability of customers going bankrupt known as bankruptcy score.
To sum it up, score is just another tool for profiling and qualifying. And no, it's not only used for approving or rejecting loans alone. There's a wide usage towards it which Malaysia is still at a young age in using scoring methodology.
This post has been edited by b00n: Oct 11 2011, 05:15 PM 
Oct 10 2011, 11:50 PM
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