Cut-off Strategy: Approval Rate vs Bad Rate (with a Chart)
This lesson is part of the course
In this lesson
You build Larkspur's gains table by cut-off score, chart approval rate against the bad rate of approved loans and pick the lowest cut-off that meets a 3% bad-rate target.
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Lessons in this course
- Coarse Classing: Binning a Characteristic into Good/Bad CountsFree
- Weight of Evidence: LN of the Good/Bad Distribution Ratio (with a Chart) Locked
- Information Value & Predictive Power Bands Locked
- Monotonic Bins: Spotting a Reversal and Merging Classes Locked
- Points per Attribute: Factor, Offset, PDO & Base Odds Locked
- The Scorecard Table: Scoring Applicants with Lookups Locked
- Cut-off Strategy: Approval Rate vs Bad Rate (with a Chart) Locked
- After Launch: Population Stability Index & Characteristic Analysis Locked