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Credit scoring models

• These are quantitative models that predict bankruptcy. They establish which factors are important with regard to credit risk. They evaluate the relative importance of these risk factors, improve the estimation of default probability, automate the rejection of bad loan applicants, and improve the pricing of the loan. They also help calculate any potential future loan losses and possible revenues.

 
 

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 Embedded terms in definition
 Bankruptcy
Credit risk
Credit
Default
Future
Probability
Rejection
Revenues
Risk
 
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