About Us

Who we are

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Credit Risk Scorecards is a consulting firm with expertise in credit and behavioral scorecard development. We are credit scoring professionals with a passion for this art, and our mission is to teach you how to develop these models so you'll be well-equipped to tackle your toughest business challenges. Our scorecard training is top-notch! For those of you outsourcing your scoring projects, stop throwing money at the problem and start building your own models—let us teach you how!


Our mission

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Our mission is to teach you the art and science of scorecard model building, using your data for your next scoring project. Let us "teach you to fish" as we cover each step in the scorecard development process both in depth and interactively. The entire process will make sense to you because we're working with your data, and creating a real scorecard to serve your business needs. Together, we'll cover all the bases and you'll walk away with the education you need and a real scorecard model that's ready for production. You can do this—we'll show you how!  

A special message to consumer lenders

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If your company specializes in consumer lending for small to medium sized loans, it's time to bring credit and behavioral scoring practices in house. Contact us to learn how scoring can improve your bottom line. Use behavioral scores to identify high risk debtors before early-stage delinquency turns into late-stage delinquency, or worse! Take control of your collections practices with empirical scores driving your efforts. It's not just for big banks anymore—custom scoring is available for everyone!  

Scorecard Basics

What is a scorecard?

A scorecard is a powerful statistical model that can help with mission critical decision making. The modern scorecard has virtually transformed the credit-granting and collections industry over the past decade. 

Scorecards are used to help make approval/decline decisions on new applications for granting credit (they tell you who's likely to default before you authorize credit); they're used extensively to help guide collection efforts (they tell you which delinquent accounts are likely to self-cure, or get worse); they're used in marketing to decide who to send mailers to (they tell you which consumers are most likely to respond); and they're used in many, many, other ways across a multitude of industries.

Human behavior repeats itself over time (good behavior and bad behavior). If you're looking to gauge the likelihood that a potential or existing customer of yours is going to exhibit some type of behavior, then scorecards are the way to go! We'll discover the patterns that exist in your historical data and use that information to build a statistical model you can use to score future accounts. 

Want to know the statistical odds before taking action? A scorecard model is the answer! Let us teach you this art and help you stay ahead of the curve in your industry.  


Why can't I just use FICO?

Everyone's familiar with the FICO score, right? The higher the FICO, the lower the risk of default. The FICO "model" is a scorecard model, exactly like the ones we'll teach you to build. The trouble is, the FICO model wasn't built on "your" data. It was built on customers across a host of industries covering most of the credit spectrum. The result is a significant loss of predictive power.

Consider trying to predict the behavior of a cheetah. So you go to the zoo and monitor every animal with four legs and a tail. What you'll end up with is a generalized consensus that is roughly true of cheetahs, but is also true of elephants, giraffes, and bears. If you want to build a model that predicts how cheetahs behave, you need to study just cheetahs! FICO is not the answer and is costing you money!

It's always fun to compare your model's "predictive power" to that of the FICO score. We'll show you how to perform these comparisons and you'll be blown away at how much stronger your models are than FICO—and that power boost will significantly improve your bottom line!  

Techniques

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What are the odds?

Odds are all around us. Flip a coin, the odds are 50% that you'll come up heads. With your new scorecard in hand, you'll know the precise odds that your applicant, customer, or potential lead will perform whatever it is you need to predict. The answer lies in your data, and we'll teach you how to reveal its secrets! Odds are you'll love it!

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It's about accuracy

If you're like most credit professionals, whether you're contemplating an irreversible approval, or some other type of credit-based decision, you're well aware of the important decision before you. So like so many times before, you set out with an open mind and scan the strengths and weaknesses of your applicant to guide you in this all important decision.

Time to hit your favorite variables to see what you've got. For some, it's a combination of gross monthly income, time in residence, and FICO score; for others, it's time on the job, high performing credit, and loan-to-value. You probably scan the credit report and determine the overall balance of credit, payment performance, time in bureau, and whatever else your experience and well-seasoned intuition tells you to analyze.

But what if I told you, your favorite 5 variables ranked #11, #32, #67, #112, and #168 in the top 200 most predictive variables in your tool box. I bet you'd really like to know the top 10! And I'll bet you a dollar you can't guess your #1! This is just one of the powerful techniques you'll learn as we embark on your scoring project. You'll walk away with tips and techniques you can use elsewhere in your overall risk management platform. We'll touch on topics of pricing, product-tier selection, and other areas where scores can play an important role within your organization.  

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Breakpoint Analysis

If you've ever had to set some sort of business rule based on finding just the right break points for a given variable, you've probably wondered if you picked exactly the right breaks. For example, maybe you have a policy that requires an increasing amount of down payment when the job time is <5 years, <3 years, and <1 year respectively. How did you come up with those breaks? They probably seem appropriate, but are they really optimal?

The challenge of course is to identify points where the risk takes a dramatic leap or decline. Break point optimization is a critical part of any decision-making platform. Sadly, this all important process is often done judgmentally and this is costing your organization money—plain and simple. As they say, knowledge is power and we'll teach you a simple and effective way to set optimal break points for every situation in your decision platform. This simple technique is tried and true, and just another of the many useful techniques you'll take away as we teach you how to develop scorecards.  

Software

What software will I need?

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You'll need a Mac or PC running Excel for about 95% of the work. You'll also need a separate software program to run the logistic regression procedure.

Many organizations use a software platform produced by SAS. But the truth is, there are less expensive solutions out there that can run the logistic regression procedure and get the exact same result. You'll probably want to budget $2k to $3k for this special software and we're happy to help with a recommendation.

Excel huh?

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The scorecard development process involves completing several independent steps (or modules) in a prescribed order. All but one of these steps can be completed using modules that you can design and program in Excel. You'll learn all the concepts necessary to do this, but to do so, you'll need to be experienced with Excel—nothing too fancy, but you should be comfortable writing formulas using a variety of Excel functions.

Our intent is to teach you the art of scorecard development, not the art of Excel programming. As we develop your scorecard together, we'll be using pre-written Excel modules, already designed by CreditRiskScorecards.com. These modules are included in the training package and are offered on an "as-is" basis, with full access to the formulas for subsequent editing with no password protection.

How long is the training?

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Training is an interactive process and consists of two distinct phases. Phase 1 consists of 2 full-day (8-hour) training classes at your place of business or home office, during which time our scoring consultant will cover our nine-step process in a classroom setting. This training is best suited for a small group of developers (less than 5, but 1 or 2 is more common).

Phase 2 can take anywhere from a few weeks to a month, and is where you develop a complete scorecard model on your time, but with our help, following the outline presented during the Phase 1 training sessions. You'll use your own data and develop a scorecard model to serve a real business purpose. You will follow our nine-step process and we will collaborate via video-conference, telephone, and/or email throughout Phase 2.

At the conclusion of each step, we will audit and critique your work, providing constructive criticism and advice. We will ensure everything checks-out prior to proceeding from one step to the next.

The first scorecard project is not a race against time. Our desire is to "teach you to fish", and our intent is to provide a thorough and interactive education that will serve you for years to come. Our refreshing approach to teaching this skill in a simple and straightforward manner is where CreditRiskScorecards.com sets itself apart from the rest!

Products

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Application Scorecards

An application scorecard can be a sole arbiter (standalone decision tool), or a decision support tool in the loan qualification and decision process. Often, two or more scorecards are created that work together either alone or in conjunction with criteria-based tests to decide who to approve, decline, or pass-through to an analyst for human decisioning. Scorecards can also play a role in product tier selection, APR and term selection, fee selection, setting the max qualified payment amount, establishing a credit limit, and other factors that go along with approving an applicant for credit.

Scorecards are made for speed and automation. With scores, you can automatically decide thousands, or even hundreds of thousands of applicants in near-real time, with accuracy, control, and efficiency! Let CreditRiskScorecards.com show you how to build these tools and start using empirically derived scorecard models to help automate and improve the accuracy of your loan granting policies and procedures. Contact us today!  

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Collections Scorecards

Scorecards have revolutionized the collections process in recent years. Scorecards can predict with significant accuracy when early-stage delinquent accounts will likely roll into deeper delinquency, self-cure, or declare bankruptcy (among other possible outcomes). Armed with this knowledge, you can establish different collections strategies for each class of delinquent accounts (e.g., send a letter, launch a virtual call campaign, or call on the dialer in predictive mode vs. preview mode). Perhaps you want to know which of your delinquent accounts you should assign to repossession or foreclosure; or which of your charge-off accounts you should try to collect yourself vs. which you're better off selling to a collection agency. Scorecards can help with all of these decisions and so much more.

Use scorecards to develop your own champion/challenger campaigns to continually improve your processes over time. We'll show you how and hold your hand through the entire process. Remember, CreditRiskScorecards.com is first and foremost a consulting firm with a team of talented model developers and educators. Our model development techniques follow industry best practice methodologies. We'll teach you to be self-sufficient, and in charge of your own destiny. Bringing custom-scorecard development in-house is perhaps the most valuable and cost-effective skill you could ever introduce to your organization. Contact CreditRiskScorecards.com today to learn more!  

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Marketing Scorecards

Want to optimize the response on your next mailer? Scorecards are the answer! We'll teach you how to discover the traits of your most profitable, most responsive customers—and we'll build a scorecard model that targets consumers that meet those exact qualities. This is the best way to maximize your advertising dollars and is exactly how the most successful marketers in the nation do it. Once again, scorecards are the answer!

Armed with this knowledge, you'll be equipped to build new scorecards with every mailer to continually tap into the predictive behavioral qualities of your most recent responders. 

We'll show you how to produce multiple tiers of potential target segments, with each tier consisting of a successively more "responsive" group of potential leads. If you're on a tight marketing budget, then choose only the highest scoring segment to maximize the response rate for the least amount of advertising dollars. Combine a mailer scorecard with a pre-pay scorecard and you'll discover fantastic cross-sell and up-sell opportunities to maximize customer retention.

Our Value

So what does it cost?

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Consider that outsourcing scorecard projects to professional scoring agencies can easily top $50k per scorecard—and consider that most such agencies aren't interested in teaching you this invaluable skill. Consider that these very same companies also charge upwards of $15k per occurrence to conduct scorecard validations to ensure your models are still predictive (we'll teach you this too as part of our package). And consider how many scorecards you'll build for your organization to help tackle new business challenges in the years to come... when you consider all of the above, you'll quickly see just how much value CreditRiskScorecards.com truly offers its clients. We offer incredible value and undeniable ROI for your organization! Not only will your team walk away with an incredible new skill set, but you'll walk away with an actual scorecard you can implement and use right away.  

Pricing and Services

2-Day on-site Training & 30-Day scorecard Development and Collaboration Project

  • 2-days of classroom training at your location
  • 9-step scorecard development project plan with milestone checkpoints to ensure success
  • Includes Intelligent Credit Scoring, Second Edition by Naeem Siddiqi
  • 30-day post training collaboration and consulting engagement
  • Full suite of excel modules includes: automatic characteristic binning module, gaines table module with KS calculation, bad rate conversion table module, and post implementation validation module (everything you'll need to make quick work of building and maintaining your scorecard implementations)
  • Collaborative consulting on how best to utilize your new scorecard in your production environment

Cost is $25,000*

* plus reimbursement for travel and meals related expenses

Other Services

Scorecard Development Services

Not interested in learning how to build scorecards internally, but have a scorecard project you'd like to outsource? Let CreditRiskScorecards.com handle your next project. Contact us now!

  • Includes all scorecard development related services
  • We'll deliver your scorecard and provide recommended implementation strategies
  • Documentation package, including project plan and all pertinent development and validation statistics

Cost is $15,000*

* 20% discount for additional scorecards

More Services

Automatic Loan Decision Strategies

We have over 20 years' experience in building automatic loan decision platforms. Call now to see how we can help you plan out a fully automated loan decisioning architecture.

Champion Challenger Strategies

Need help building a best in class A/B testing framework for your loan servicing/collections department? Call now to learn how we can help!

Marketing Campaign Strategies

Call today and let's discuss your next risk management challenge. Whatever it is, CreditRiskScorecards.com is here to help!

                 

The future is now!

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  We want to sincerely thank you for considering CreditRiskScorecards.com for your next scorecard development project. This will be the final outsourced project of its kind for your organization and we are confident you have what it takes to make this important transition a success! We are committed to work with you until you fully understand our nine-step process and we'll be right by your side the whole way through. You'll be inspired by the enthusiasm and passion we show as we collaborate on your project together, and you'll be amazed at how easy and intuitive this process really is! Take your company to new heights—contact us today!   

Contact us today!

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  Call or send us an email describing your next project. We'll contact you within 24-hours and discuss our consulting package in more detail.

  We offer a unique and simple solution that will pay for itself over and over again! 

Best regards, CreditRiskScorecards.com 

Please email inquiries to: info@creditriskscorecards.com 

Or call us at: (949) 233-5274  

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