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Banking & Lending terms
Credit scoring, underwriting, deposits and the data behind lending decisions.
Credit scoring Ranking a borrower's creditworthiness with a numeric score derived from their credit history and other data. Loss given default (LGD) The share of an exposure a lender expects to lose if a borrower actually defaults, after recoveries. Net interest margin (NIM) A bank's net interest income as a share of its interest-earning assets, a core measure of lending profitability. Probability of default (PD) The estimated likelihood that a borrower fails to make required payments on a debt within a given time horizon. Underwriting analytics Data analysis used to decide whether to accept a risk and at what price, in insurance and lending alike.