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Graphical models of applicants for credit

Hand, D. J.; McConway, K. J. and Stanghellini, E. (1997). Graphical models of applicants for credit. IMA Journal of Mathematics Applied in Business & Industry, 8(2) pp. 143–155.

DOI (Digital Object Identifier) Link: http://dx.doi.org/10.1093/imaman/8.2.143
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Abstract

Graphical models are a class of statistical tools which have recently undergone extensive theoretical development. They allow one to build models representing the relationships between large numbers of variables, helping to identify paths by which different variables are influenced by others. They look particularly promising for
credit-scoring and credit-control problems, since they allow the construction of a holistic applicant model. They can be used in an investigative way, displaying the major influences between variables, or dynamically, allowing statistical prediction of the likely behaviour of individual applicants. They can also be used 'in reverse' to identify the characteristics of individuals demonstrating certain kinds of behaviour.
This paper describes an initial investigation into the value of graphical models for bank loans. In particular,we describe the graphical models we constructed for a large set of unsecured personal loan data, and we draw some general conclusions.

Item Type: Journal Article
Copyright Holders: 1997 Oxford University Press
ISSN: 1471-6798
Academic Unit/Department: Mathematics, Computing and Technology > Mathematics and Statistics
Item ID: 24104
Depositing User: Sarah Frain
Date Deposited: 10 May 2011 12:05
Last Modified: 10 May 2011 12:05
URI: http://oro.open.ac.uk/id/eprint/24104
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