The planning of marketing strategies in consumer credit: an approach based on graphical chain models for ordinal variables

Abstract

This paper explores the potential of graphical chain models in defining marketing strategies in the consumer credit field. When ordinal variables are involved, the potential can be increased by exploiting the ordinal scale of variables. In the presented research, the effectiveness of ordinal methods is analysed in three important activities for building a score-card: (1) in coarse classifying of variables, (2) in model selection and (3) in measuring the prediction accuracy of the model.

Keywords:

• consumer credit
• behavioural scoring
• conditional independence
• graphical chain models
• ordinal variables