Validating Consumer Credit Risk Models: What Methods Are Relevant to Assuring Your Model's Stability in a Volatile Business Environment

Table of Contents

• Table of Contents
• Financial Insights Opinion
• In This Report
• Situation Overview
  • Variability Within a Population
  • Consumer Behavior
  • Who Uses Validations?
  • Who Should Perform Validation Analytics?
  • How Validations Fit Within an Enterprise Risk Management Context
• Method Specifics
  • Tracking Through-the-Door Populations
    • Final Score Report
    • Figure: Final Score Report
    • Population Stability
    • Figure: Population Stability
    • Characteristic Analysis
    • Figure: Characteristic Level Changes
  • Interval Bad Rates
  • Figure: Interval Bad Rate Analysis
  • Validation Sample
  • Components of a Score Validation
  • Statistical Measures Used in Score Validations
    • Kolmogorov-Smirnov Statistic
    • Figure: Kolmogorov-Smirnov Statistic
    • Divergence
    • Figure: Divergence
    • Predictiveness Index
    • Figure: Predictiveness Index
    • Information Value
    • Figure: Information Value
• Future Outlook
• Essential Guidance
  • Actions to Consider
• Learn More
  • Related Research
  • Synopsis