Credit scoring and behavioural scoring are the techniques that help organis
ations decide whether or not to grant credit to consumers who apply to them
. This article surveys the techniques used - both statistical and operation
al research based to support these decisions. It also discusses the need to
incorporate economic conditions into the scoring systems and the way the s
ystems could change from estimating the probability of a consumer defaultin
g to estimating the profit a consumer will bring to the lending organisatio
n - two of the major developments being attempted in the area. It points ou
t how successful has been this under-researched area of forecasting financi
al risk. (C) 2000 Elsevier Science B.V. All rights reserved.