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What is scoring or evaluation system

2019

In Currency Now we can approve or deny a credit online in a few minutes thanks to the Big Data Scoringtechnology , which allows all data analysis processes and valuation of personal loans online to be fully automated . But what is scoring ? That is what we are going to deal with here.

The scoring is neither more nor less, the analysis of information about an applicant for a loan , based on which approval or rejection is then recommended. In this analysis we work with two types of data: those provided by the customer and those obtained through third parties.

The scoring in traditional banks

In traditional banks, scoring is carried out by the employee who makes the decision to grant credit. In general terms, the scoring of all banks takes into account monthly income, declaration of assets and equity, and the purpose of the credit . Some entities may also request proof that there are no other active credits and in the case of mortgages, registration and appraisal documents. All this, in terms of the information requested of the applicant.

In addition, a bank’s evaluation system values ​​other information that is not provided by the client. You can access it in your own database, where issues such as the age and profession of the client are recorded , whether or not he has other financial products and his credit history, or through third parties, such as delinquent files such as Asnef or Rai, the Central of Information of the Risks of the Bank of Spain (CIRBE) or the Cirex, the file of the good payers.

The scoring in modern credit institutions online

In the current credit companies that operate 100% online, scoring is the only one that decides whether a credit is approved or rejected. As in traditional banks, the automated evaluation system takes into account information provided by the client (income, equity …) and obtained by other means (credit history, Asnef …) , although the Internet comes into play here. That is, Big Data .

The scoring of Monedo Now uses an algorithm capable of analyzing more than 15,000 data and calculate the credit risk assessment of a person in seconds

This means that the scoring of an online credit institution, such as Currency Now, also analyzes information related to the customer easily obtainable on the Network, such as location (GPS), online shopping behavior or that provided by social networks (number of friends, likes , fan pages …).

In the specific case of Currency Now, scoring is performed by an automated algorithm capable of analyzing more than 15,000 data, and therefore calculating a person’s credit risk assessment, in just seconds.

How scoring works

The scoring calculates the probability “that a credit or loan, of a certain amount, for a specific type of customer, a purpose and a term, will go into default”, as explained in Bolsamanía .

Among other issues, scoring values ​​things like the income-expense ratio, the seniority of the employment contract or the borrower’s borrowing rate. In this sense, some of the most valued features of scoring are speed , since it evaluates the granting of a loan in a few minutes; the simplicity , because it eliminates the cumbersome paperwork; the objectivity, as always uses the same criteria in their evaluations, which are applied to similar information between different cases, and reliability , since according to BBVA, the scoring “Learn from your own mistakes”, because “analyze which operations have worsened and act accordingly, through statistical analysis.”

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