Credit scoring is one of the most widely used applications of quantitative
analysis in business. Behavioural. scoring is a type of credit scoring that
is performed on existing customers to assist lenders in decisions like inc
reasing the balance or promoting new products. This paper shows how using s
urvival analysis tools from reliability and maintenance modelling, specific
ally Cox's proportional hazards regression, allows one to build behavioural
scoring models. Their performance is compared with that of logistic regres
sion. Also the advantages of using survival analysis techniques in building
scorecards are illustrated by estimating the expected profit from personal
loans. This cannot be done using the existing risk behavioural systems.