A Study On Personal Credit Scoring And Credit Card Risk Control

With the rapid pace of reform and IPO, the operation structure of China's commercial banks has gradually met with international standards. Personal banking business has become more and more important to banks'profitability and market competitiveness. Based on personal credit score, credit risk measurement and control will ensure sound and fast development of consumer lending and credit card business. The implementation of credit risk measurement and control will upgrade risk and reward management capability.Since the major risk of commercial bank is credit risk, Baselâ…¡pays much attention to the internal model of credit risk management, and defines retail exposure according to the low-value characteristics of a borrower or a single loan. Credit score is the crucial base of retail exposure internal rating, and the fundamental requirement to realize the wholesale model for retailing banking business and to fulfill the operation and risk management for personal banking business.Originated from the USA and having evolved for about a hundred years, credit card has become one of the most active and important financial instruments of credit payment by constantly adopting new technologies. High risk, high profitability, high growth and scale effect have made it a rich mine for retail banking. However, what accompanies high profits is the high risk occurring in the process of market expansion: losses from bad debts and fraudulence account for as high as 25% of the total costs. Measurement and control of personal credit risk is always a key research topic for credit card development. This article, through a complete and systematic...