The score on credit scoring in small business lending
Did credit scores predict the subprime crisis?
One would think that credit scores would be a predictor of who would default on a subprime mortgage. But that doesn't seem to be the case.
Mortgage scoring and the myth of overrides
While many perceive a dark side to the use of overrides in the mortgage underwriting process, Stanley Longhofer of Wichita State University disagrees. This article concludes the five-part series on credit scoring and fair mortgage lending.
Some benefits of credit scoring begin to surface
The role of relationships in small-business lending
In the presence of imperfect information, both large and small banks try to find alternative ways to identify creditworthy borrowers. Lending relationships are one way to go about this. Relationships between banks and small businesses tend to be much closer than those between banks and large businesses. This Commentary explains why lending relationships are valuable to both small businesses and banks, how they reduce information-lending problems, and what other solutions exist to help in the reduction.
Credit where none is due? Authorized user account status and \"piggybacking credit\"
An "authorized user" is a person who is permitted by a revolving account holder to use an account without being legally liable for any charges incurred. The Federal Reserve's Regulation B, which implements the 1974 Equal Credit Opportunity Act, requires that information on spousal authorized user accounts be reported to the credit bureaus and considered when lenders evaluate credit history. Since creditors generally furnish to the credit bureaus information on all authorized user accounts, without indicating which are spouses and which are not, credit scoring modelers cannot distinguish ...