Updating Your Decisioning or Scoring System?

Once a scorecard has been redeveloped, it is important to measure the impact of changes within the strategy by replacing the old model with the new one. This impact assessment can be completed with a swap set analysis. The term swap set refers to “swapping out” a set of bad accounts and replacing them with or “swapping in” a set of good accounts. Different approaches can be used when evaluating swap sets to optimize your strategy and keep:

  • The same overall bad rate while increasing the approval rate.
  • The same approval rate while lowering the bad rate.
  • The same approval and bad rates but an increase in customer activation or customer response rates.

When measuring your swap sets, remember to also include the population that doesn’t change — those accounts that would be approved or declined using either the old or new model.

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