credit scoring model

A credit scoring model is a mathematical model performed by lenders and financial institutions used to estimate the probability of default (e.g., bankruptcy, obligation default, failure to pay, and cross-default events). This probability of default is usually presented in the form of a credit score. A higher score refers to a lower probability of default and vice versa. Several factors affect the scores some of which are payment history, age, number of accounts, job history, and credit card utilization.