Credit Scoring Applied to Special Case

The present work studies an bank actives in the loans with repayment through payroll deductions a employees of the state government. Those employees have legal job stability, so is very difficult that an employee is fired. Given both, job stability and the sure payment, the default probability is very low, but Argentine banking regulator requires that under certain circumstances a bank must provisioning (charge a loss) to debtor paying in a timely manner the debt contracted but delay pays of debt with other bank. This become very expensive for the bank, so, the bank want avoid give a loan to whose can fall in this situation.

The bank requiered us to design a model that predict if a debtor will be reclassified during the next year. The bank also requires build a score system and pick a cutoff that reach a reclassified rate lesser than 0.045, but allowing high approval rate.