CREDIT SCORING AND THE CONSTRUCTION

Automated credit application scoring is integral to lending money. For bankscredit application scoring provides a mechanism for managing risk and henceprofit: for borrowers it means immediate access to goods and services whichmight only have been accessible in the future. For borrowers, therefore,access to credit fundamentally shapes their every existence. Whereas allprevious research exploring the unintentional effects of credit scoring hasfocused on its discriminatory effects, the main purpose of this study was toexplore how borrower identity is unintentionally constructed through the creditscoring technologies of a retail bank. With a view towards constructingdifferent borrower identities, it moreover proposed alternative scorecardcharacteristics which hitherto might not have been explored.The study was wholly explorative and thus qualitative in nature. Criticalethnography was used as the principle method of analysis and means ofinterpretation.The main findings were that there are three broad sources of credit scoringcharacteristics and that these characteristics are associated with, notcausative of, borrower riskiness. In addition, a non-exhaustive list of fourassumptions underpinning credit scoring and scorecards and sevenassumptions, which are made about borrowers by scorecard practitioners,were identified. As a consequence of these assumptions it was argued thatthere are groups of borrowers who are unintentionally excluded through creditscoring. Two primary consequences of credit exclusion were entertained andfinally, some few alternative scorecard characteristics were proposed.Collectively these findings support the view that borrower identity issystematically fabricated on an ongoing basis through the naïve application ofprocesses, systems and technologies of credit scoring practitioners. It wasalso argued that the future of application scorecard building wouldiiisee more advanced variables being used which will give rise to a selfregulatingborrower, less overtly disciplinary banks, and more pervasive creditbureaux.