Role of Credit Database on Internal Credit Scoring: a Case Study of Iranian Private Banks

This research intends to study internal credit scoring of consumers of the banks. Besides estimating the customers’ need, they could know their capabilities in reimbursing the facilities. Therefore, to prevent being biased, the credits of the customers are assessed by selecting parameters, using current information and history of the customer, and by relying on demographic characteristics and credit history characteristics. Moreover, the credit and capacity of the customer are presented by credit score, and decision made upon accepting or rejecting the customers’ application for getting the facilities and credit reference database by case study done on Karafarin Bank, Sarmaye Bank and City Bank, also to suggest solutions for improving this system; thus, a questionnaire used for collecting and analysing ideas of the heads or deputies of branches of the those banks. Interval data were examined by proportion and Friedman test and showed that by testing the hypothesis for each bank, separately and cumulatively, in all three banks, a half or more than a half of the answerers selected “much” or “ very much” options, therefore the hypothesis was confirmed.

Credit Assessing; Credit Risk; Credit Scoring; Bank Strategies; Credit Risk Measurement, Parameters of Credit Risk Measurement Models, Credit Reference Database.