Topic A Course Introduction Credit Scoring

Topic A Course Introduction Credit Scoring

1. Credit Scoring Overview of programme / module Schedule Content Work Assessment Emphasis University of Edinburgh Credit Scoring

2. Schedule For 2022, the course will be delivered to you in 4 ways: Lectures A – there are 14 hours of live lectures Lectures B – there are 2 (hours of) pre-recorded lectures Labs – there are four labs Piazza Forum

3. Class Dates Lectures Labs Friday Jan 21 11:10, 12:10, 14:10 Friday Jan 28 11:10, 12:10 15:10, 16:10 Friday Feb 4 11:10, 12:10 15:10, 16:10 Friday Feb 11 11:10, 12:10 15:10, 16:10 Friday March 11 11:10, 12:10 15:10, 16:10 Friday March 18 11:10, 12:10, 14:10 Lab times are subject to confirmation

4. Lectures The course content is in the next slide. There are 16 topics - labelled A to P. One or two topics may only occupy 10-15 minutes of lecture time. Topic F will occupy about 5 hours in total, split into 8 sections.

5. Topics A Course Intro B Intro to Scoring History C What and Why? D Credit Products E Credit Data pre-recorded F How are Scorecards developed? G Setting the Cut-off pre-recorded H Some Difference across the Credit Cycle I Over-rides J Risk Based Pricing K Monitoring L Markov Chains M New World N Regulation O Data Science and Scorecard Development P Affordability

6. Labs There are four lab sessions. The labs will run on Friday afternoons. You will be allocated to labs. Labs will be on a face-to-face basis.

7. Labs In the labs and in some assessment questions, we will be using two data sets: The Irish Data Set. This has almost 13000 records. The Lending Club data set – which has c. 200K records These data sets will be introduced to you in Topic E. Before the first lab, you should look at the data sets and familiarise yourself with them and their content. During the course, we will introduce some ideas and theories and then practice them in the lab sessions, using real data for you to explore and model

8. Plan of Class Dates and Topics Topics Lab Friday Jan 21 A – D, F1 and part F2 Before Jan 28 View Recording of E Friday Jan 28 F2 – F4 1 Friday Feb 4 F5 – F7 2 Before Feb 11 View Recording of G Friday Feb 11 F8, H-J, part K 3 Friday March 11 Part K, L, M, Part N 4 Friday March 18 Part N, O, P

9. University of Edinburgh Credit Scoring Credit Scoring – Reading List A comprehensive reference list will be given out later. There is no required reading but two books could be of much use: Credit Scorecard Development and Maintenance - by David Edelman and John Lawrence - published on Kindle Credit Scoring and its Applications - by Lyn Thomas, Jonathan Crook and David Edelman, 2 nd edition, (2017) - ISBN 978-1611974553

10. University of Edinburgh Credit Scoring Credit Scoring - Assessment There will be two assignments. Assignment 1 for 35% of the total grade for the course … will be issued on February 7, and be due on February 17. Assignment 2 for 65% of the total grade for the course … will be issued on March 21, and be due on April 7. Assessments will include Some closed analytic exercises / calculations Some discussions / very short essays Some data analysis and modelling

11. University of Edinburgh Credit Scoring Credit Scoring Emphasis The emphasis will be on the practicalities and the issues that arise in the business and credit world. As a result, there will be uncertainties and opinions. Not everything we look at has a single correct answer. We will consider several modelling methodologies, but we will not explore these too deeply; that is for other modules and courses. We simply need to get an appreciation of what they are and their strengths and weaknesses.