A Study on Evaluation of Consumer Credit's Risks of Commercial Banks

Consumer credit plays an important role in pulling the growth of economy, improving living standard of the people, as well as increasing profits of commercial banks. But the studies on the management of consumer credit's risks are still in the exploring phase. In order to provide some references for banks, this paper is composed. Firstly, credit risk is analyzed and identified, 12 indexes as the main influencing factors are chosen and quantified, and evaluating model is established through weighted average. Then, British commercial banks' historical data of the ratio of bad debts are used for reference to form the testing model of connecting credit grade scores with expectation ratio of bad debts. Finally, based this testing model, evaluating model of credit risk is tested and adjusted.