Page 140 - Special Topic Session (STS) - Volume 1

STS420 Jianhua (Klyment) H.
they have credit deals with the customer such as car renting, visa applying and
so on.
It is in this requirements that e-wallet companies such as Alipay backed by
Alibaba, WeChat Pay powered by Tencent, to start considering setup a
personal credit score model for these merchants to evaluate customers credit
history.
In this article, we are discussing three aspects of personal credit score
including sources of data collection, credit score modeling methods, and
applications of credit scores.

2. Methodology
The methodology we apply for conducting research is mainly public search
and experts interviews. Due to confidential business reasons, some data we
present in the illustration is non-disclosed.

3. Result
Before we dive into the personal scores’ modeling, we shall have a brief
understanding of credit reporting definition and industrial development.
3.1 Definition and Industrial Structure
Credit reporting is the credit profile of individual or enterprise set up
by a professional and independent institution which can collect, store and
analyze information obtained from individual and enterprise legitimately.
The primary purpose of setting up this profile is to serve credit inquiry
platform, helping them identify risks. A typical example of credit reporting
and credit inquiry platform is the Credit Reference Center powered by The
People’s Bank of China.
The credit score is a simplified version based on credit reporting. It is
a ranking indicating an individual’s default rate and potential losses caused
by him, which is evaluated by third-party credit inquiry platform based on
debtors’ capacity and willingness to repay the debt principal and interest.
The industry structure of credit reporting is simple and clear; and three
significant parties are getting involved including data supplier, credit
inquiry platform and credit score inquirer.
Data supplier mainly includes the bank, e-Commerce site, water,
electricity, and gas provider, telecom operators, educational department,
hospital and medical departments, public security bureau and so on. It
almost covers every functional department tightly related to people’s daily
life.
After credit inquiry platform collects data from the above suppliers,
they will process for data laundry and gives out a personal credit score
based on certain calculation models. There are three types of credit inquiry
platform including private credit inquiry institution, enterprise credit

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