AI Credit Scoring Software for borrowers credit assessment

February 02, 2022 Admin
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Credit Scoring Software in India is an advanced technological solution that supports innovative credit scoring for a client. Let’s understand how it is a problem-solver for companies. 

 

The AI-powered Credit scoring software is a highly effective tool for the credit assessment of the borrowers. This specialized software helps in building unique scoring models and efficiently offers well-structured credit solutions within a few seconds time-frame. With the help of the accuracy and precision, the credit solutions are attained which is a time-saving activity and also unbiased.

 

What is credit scoring software?

One of the major factors that the credit scoring software supports is to incorporate a transparent analysis of specific relationships, transactions, and more. Their ability to consider n numbers of issued invoices and the proceeding of payment collection as well makes them even more reliable.

 

While calculating a client's credit score via the AI software, it includes external information, namely, credit insurance details, exceeded credit limits, credit ratings, etc. Apart from this, import of critical information is possible from other sources into the database, like risk codes, locations, etc. 

 

Additionally, a forced stop can be enabled for the automatic processing of a loan application for various reasons. This way analysis can be done in your credit or risk department. The best part about a credit scoring software is that it can combine both financial and non-financial data analysis that further sums up to a detailed overview. With this highly efficient software, evaluation of independent clients and SMEs can be successfully executed.

How does credit scoring software work?

Step 1. Defining the scoring segment - Identification of customers and products for the scoring software. 

 

Step 2. Select  the scorecard type from the following:

  • Statistical:Based on customers’ past loan data
  • Judgmental: Based on expert judgment and institutional experience
  • Hybrid: It is a mixture of both statistical and judgmental techniques

Step 3. Credit scorecard is designed - The structure of the scorecard design depends on the following factor:

  • Definition of a bad loan
  • Discovery of characteristics that influences risk factor
  • Development of factors supporting the best results during back-testing

Step 4. Testing, Implementing and Managing the phases of scorecard

  • Back-testing - Complete analysis of back-testing results, in order to examine the impact of different scoring policies.
  • Pilot testing - Identifies the score ranges, unexpected complications in collected data, all these are required to create a scorecard.
  • Integration of score software with the IT system - Scorecard module works with the support of banking infrastructure, technical experts that can adapt solutions.
  • Long-term software management. Scorecard management offers a long term solution to provide assistance for development and implementation of software updates.

Advantages of using credit scoring software

AI Credit Score Software transforms credit scoring in many ways, stating a shift in this aspect. Here are a few advantages of using credit scoring software:

  • Improved Customer Focus
  • Faster Speed
  • Better access to credit
  • Beneficial for stakeholders

Process of credit score assessment

A credit score ranges between 300-900. Usually, lenders consider 750 score and above as ideal. However, each credit score company follows its own algorithm to calculate the score, based on the following factors:

  • High impact : History of payment 
  • High impact: Ratio of Credit Utilisation
  • Medium Impact: Credit Age
  • Low Impact: Total number of Accounts 

Conclusion:

From the above points, the assessment of credit score with the support of an AI powered Credit Scoring software is a step towards the advancement and time-saving methodology, which helps in attaining more effective solutions for any financial expert. There are a few Best Credit Scoring software in India that would offer a fair credit score assessment, ScoreMe is one of those reputed analytics software companies that offer credit monitoring services.

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