Mastering Smart Credit Scoring Risk Management Strategies Today
Types of Credit Scoring Models
There are several types of credit scoring models used by financial institutions, each with its unique approach to evaluating credit risk:
- FICO Score: Widely used in the United States, the FICO score ranges from 300 to 850 and considers factors such as payment history, amounts owed, and length of credit history.
- VantageScore: Developed by the three major credit bureaus, this model offers a similar range but differs in its calculation method, allowing for a broader range of data inputs.
- Custom Scoring Models: Some institutions develop proprietary models tailored to their specific customer base and lending criteria.