Automated Credit Scoring

Abstract

Commercial clients (business owners, retailers) of wholesale distributors often rely on credit lines to purchase goods, especially during economic crises when banks hesitate to lend to retailers. This affects the sales of distributors, prompting them to offer products on credit. However, when distributors extend credit, they face the risk of customer default. They need a reliable method to evaluate the creditworthiness of their customers to minimize financial loss. To address these challenges, we propose an automated AI driven credit scoring system that automates the evaluation process by analysing several features including customer purchase behaviour, transaction history, and repayment patterns to the interpretable scorecard. The system integrates generative AI–powered variable classification, automated preprocessing, Auto-Monotonic Fine Binning, and advanced ensemble modeling and instant generation of points-based scorecard. Deploying the solution as a secure cloud-native application ensures rapid, accurate, and fully auditable credit decisions significantly improving risk management and operational efficiency for wholesale distributors.