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Monitoring the Behaviour of Credit Card Holders with Graphical Chain Models

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  • Elena Stanghellini

Abstract

Consumer credit has become an enormous business in industrialized countries. Recently, finance agencies have started to develop new products aiming not only to widen their portfolio but also to keep active relationships with good clients already taken on file and to prevent bad clients from becoming a loss for the agency. As a result, models for the whole behaviour of the clients are necessary. They involve many related outcome variables, which altogether give a measure of whether the client revealed to be profitable or unprofitable. This paper aims to show the potential of graphical chain models in the described context.

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  • Elena Stanghellini, 2003. "Monitoring the Behaviour of Credit Card Holders with Graphical Chain Models," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 30(9‐10), pages 1423-1435, December.
    • Handle: RePEc:bla:jbfnac:v:30:y:2003:i:9-10:p:1423-1435
    DOI: 10.1111/j.0306-686X.2003.05451.x
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    References listed on IDEAS

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    1. D. J. Hand & W. E. Henley, 1997. "Statistical Classification Methods in Consumer Credit Scoring: a Review," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 160(3), pages 523-541, September.
    2. E. Stanghellini & K. J. McConway & D. J. Hand, 1999. "A Discrete Variable Chain Graph for Applicants for Credit," Journal of the Royal Statistical Society Series C, Royal Statistical Society, vol. 48(2), pages 239-251.
    3. Thomas, Lyn C., 2000. "A survey of credit and behavioural scoring: forecasting financial risk of lending to consumers," International Journal of Forecasting, Elsevier, vol. 16(2), pages 149-172.
    4. Nanny Wermuth & D.R. Cox, 1998. "On the Application of Conditional Independence to Ordinal Data," International Statistical Review, International Statistical Institute, vol. 66(2), pages 181-199, August.
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    Cited by:

    1. Ann Shawing Yang, 2015. "Lottery Payment Cards: A Study of Mental Accounting," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 22(3), pages 201-226, July.

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