Australia
In Australia, credit scoring is widely accepted as the primary method of assessing credit worthiness. Credit scoring is not only used to determine whether credit should be approved to an applicant, but credit scoring is also used in the setting of credit limits on credit cards/store cards, in behavioral modelling such as collections scoring, and also in the pre-approval of additional credit to a company's existing client base.
Although logistic (or non-linear) probability modelling is still the most popular means by which to develop scorecards, various other methods offer extremely powerful alternatives, including MARS, CART, CHAID, and random forests.
At present Veda Advantage, the main provider of credit file data, only provides a negative credit reporting system which contains information on applications for credit and adverse listings indicating a default under a credit contract. This makes accurate credit scoring difficult for banks if they have no existing relationship with a prospective borrower.
Read more about this topic: Credit Score
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