Dictionary of Banking Terms: judgmental credit analysis
judgmental credit analysis
approval or denial of a credit application, based on the lender's evaluation of the credit application, and credit experience with similar applicants, instead of a credit scoring model that estimates the probability of debt repayment. As defined by Federal Reserve Regulation B, a judgmental system is any method of credit approval other than an empirically derived, statistically- based scoring model. Even when scoring systems are used, though, lenders frequently over-ride the model, as when they approve a loan the system rejected.
