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Principles and Practice of Consumer Credit Risk Management

Helen MCNAB and Peter TAYLOR (2008)

(IFS School of Finance, 3rd edition - ISBN 978-1-84516-750-9)

We are sorry that the latest edition of this textbook is currently out of print. We are working with the publisher to resolve this. To be contacted when a new edition / book is ready please click here.

This standard textbook is the reference source for best practice in many consumer lenders. Written by a principal and associate of ScorePlus, it gives a framework for the analytic management of consumer credit risk. This book is aimed at meeting the needs of new entrants but is also a reference guide for experienced credit professionals. It is not a modelling textbook, but a practitioner’s guide.

Co-authors Helen McNab and Peter Taylor are widely respected practitioners and consultants in the credit risk industry. This third edition reflects first-hand research among a wealth of contacts to explain and evaluate current practices and trends. It is specifically written in the context of unsecured consumer lending products.

The text is divided into 5 parts:-

Background and introduction: sets the scene by looking at the economic and social framework for a credit operation as well as the functions required to successfully run a modern credit company.

Quantitative techniques for consumer credit: focuses on the analytic tools used to underpin credit decisions. This includes the development and validation of a range of scoring models, prefaced by a discussion on data requirements.

Strategic credit management: examines credit policies and strategies deployed across the credit cycle and the associated monitoring and control techniques.

Operational processes for managing credit: deals with the practicalities of credit risk operations and consider best practices within applications processing, account management, fraud, collections, recoveries and litigation.

Legislation, compliance and voluntary bodies: looks at the legal and regulatory framework within which the credit organisation must operate. These details will inevitably change over time, but were accurate at the time of going to press.