Gini Coefficients is a statistical measure used to evaluate how powerful our scorecards are in predicting who will fail within the next 12 months. The Coefficient ranges from 0.00 to 1.
The more effective a credit score, the better it is at giving lower scores to riskier applicants, and higher scores to safer applicants. However, it is impossible to devise a scorecard which could perfectly predict all future insolvencies, which would not also inadvertently classify some stable businesses as high risk. To avoid this, we create a scorecard which finds the most optimal balance between business risk prediction and opportunity maximisation.