Oehler, A.The basics of generally accepted scoring principles

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Andreas Oehler

Release date:

Wirtschaftsdienst, Volume 97, Issue 10, pages 748–751

Scoring and comparable methods that are used to rate people’s future behaviour can provide useful information for suppliers and thereby reduce the asymmetrical information deficits and the corresponding risks (screening). Likewise, consumers can profit from scoring if they use the scores to reveal their creditworthiness (signalling). In a market economy where markets are not fully transparent, scoring agencies act as information intermediaries. They provide information on future behaviour at the meta level so that not every supplier or consumer has to rate themselves. This is why the reliability of scores and scoring agencies is so fundamental. This article examines the principles or minimum standards for valid scoring and discusses how to introduce, regulate and test them.

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