K-Score

What is K-Score?

K-Score (representing Khmer Score) is a number that summarizes all the information from credit report into a single score. It measures the applicants’ potential credit risk at the point of application and predicts the likelihood of payment default.

It is designed to provide lenders with a bureau-based risk profile to assess new credit applicants and make more informed and accurate credit assessment decisions. It enables credit manager to quickly assess the quality of a credit application that allows the decision to be consistent.

How is the score calculated?

The score is based on the contents of credit report at a particular point in time. The designers of a score, through years of experience, determine which details are best able to predict future ability to repay. These details include many factors such as enquiry trends, credit commitments (number of primary as well as guaranteed account you have and how much you owe), payment behavior, and adverse information such as payment defaults and other key contributing factors. The impact of each element fluctuates based on customer credit profile. A number is assigned to each of the possible values and added up to give a single number. We do not score credit files where insolvency information is presented. 
The formula is CBC’s Intellectual Property and is tested and monitored regularly.

Does K-Score approve or decline the loan application?

K-Score is not a lender. It is just a tool to provide lender with risk based approach to fasten the loan decision process. Loan evaluation is still based on lender 5c. If lender also requests a K-Score, the K-Score is calculated and returned with the credit report. It is the responsibility of the lender to decide whether or not to approve loan application.

What value is this K-Score to my business?

  • Visually and easily, it is a tool that could assist you in making a better and more objective credit decision.
  • It provides the ability for institution to reduce or control bad debt levels and therefore reduce overall cost and increase profitability.
  • It potentially enables more consistent decision making: regardless of the source or where is processed the same score will result and therefore the same decision should eventuate
  • More control decision making: management will be more certain of what affects an increase in market share and will have on bad debt levels.
  • Significantly reduced application processing time: an Accept/Reject decision can be made in the time it takes an operator to input the details from the application form.
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