Personal Credit Evaluation Model

The people's bank of china issued Guidance on developing personal consumer credit and some relevant credit policy in 1999. Since then, there has been rapid development of the personal consume credit. However, the credit risk problem exposed on the business has threaten the development of consume credit market. Against this situation, it is an urgent task to form a sound credit risk management mechanism. Credit assessment is the primary link should be properly solved.At present China lacks a relatively matured credit system. It is difficult for bank to evaluate the credit states of the personal clients accurately. The traditional methods have many shortcomings such as subjectivity, apriority. They sometimes distort the real relationship between credit indicators and the credit level.In western countries, banks generally adopt personal credit assessment method of quantitative analysis to evaluate credit conditions of personal clients and develop credit assessment model by data mining technology. Data mining is defined as the nontrivial extraction of implicit, previously unknown, and potentially useful information from data or known as knowledge-discovery in databases (KDD).To do this, data mining uses computational techniques from statistics, machine learning and pattern recognition such as Discriminate analysis, Regression method, Mathematical programming, Decision tree, K-Nearest neighbor,Artificial Neural Network etc.Although many positive attempts are done, the development and application of personal credit assessment model in Chinese bank industry is still in its infancy. The research of accuracy and applicability of different models also require in-depth study. At present, Chinese personal credit rating system is imperfect and the personal credit information of commercial banks is still incomplete. Under such circumstances, it is very...