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Credit Card companies adjusting Credit Scores

Posted By Markus On December 22, 2008 10:27 am @ 10:27 am (December 22, 2008) In Statistics, Data Mining, Machine Learning | No Comments

I just read that [1] Credit Card Companies are adjusting Credit Scores based on shopping patterns in addition to credit-score and payment history. It seems they also consider which mortgage lender a customer uses and whether the customer owns a home in an area where housing prices are declining. All that to limit the growing credit card default rates.

That’s an interesting way to do it (from a risk modeling point of view) and I wonder how well it works in practice. There might also be some legal ramifications to this if it can be demonstrated that this practice (possibly unknowingly to them) discriminates e.g. against minorities.

Article printed from Markus Breitenbach: http://blog.markus-breitenbach.com

URL to article: http://blog.markus-breitenbach.com/2008/12/22/credit-card-companies-adjusting-credit-scores/

URLs in this post:
[1] Credit Card Companies are adjusting Credit Scores based on shopping patterns: http://www.ajc.com/news/content/business/stories//2008/12/21/creditcards_1221.ht
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