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-   -   Telling the customer why he was denied credit (http://book.caltech.edu/bookforum/showthread.php?t=986)

tzs29970 08-12-2012 12:11 AM

Telling the customer why he was denied credit
 
In lecture 10, the problem of how to satisfy the legal requirement of telling a credit applicant why he was denied was mentioned, since the customer and the law won't be satisfied with a statement that some parameter in some learning algorithm failed to meet a threshold.

I wonder if the bank could come up with a denial reason by fiddling the application data to find out what could be changed to make it pass. For instance, the bank could try raising the income on the application and if that turns it into an acceptance, report to the customer that he was denied for inadequate income.

Best, I think, would be for the bank to fiddle several factors, and then pick the one that requires the least change to reverse the outcome, and report that to the customer.

yaser 08-12-2012 12:46 AM

Re: Telling the customer why he was denied credit
 
Quote:

Originally Posted by tzs29970 (Post 3997)
In lecture 10, the problem of how to satisfy the legal requirement of telling a credit applicant why he was denied was mentioned, since the customer and the law won't be satisfied with a statement that some parameter in some learning algorithm failed to meet a threshold.

I wonder if the bank could come up with a denial reason by fiddling the application data to find out what could be changed to make it pass. For instance, the bank could try raising the income on the application and if that turns it into an acceptance, report to the customer that he was denied for inadequate income.

Best, I think, would be for the bank to fiddle several factors, and then pick the one that requires the least change to reverse the outcome, and report that to the customer.

Interesting idea. I don't know how this might work in legal terms.

mariovela 05-07-2013 10:57 AM

Re: Telling the customer why he was denied credit
 
This reminds me the concept of sensitivity analysis... is there a way to do a sensitivity analysis for the individual factors and compare them?? how much a change in x1 (or x2) impact Eout??


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