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Scorecard Stability – is scorecard ability to perform with expected quality even with a drift in customer base.
Chi-squared Test calculates difference between actual and predicted distributions for all borrower characteristics. The lower the difference, the more stable the developed scorecard is.
Chi-squared Test is based on Hosmer-Lemeshow factor that is calculated for each scorecard characteristics as a sum of chi-square values for each attribute (sub-characteristic).
HL factor is then compared with a reference value of chi-squared distribution for the corresponding number of the degrees of freedom. The number of the degrees of freedom is equal to the number of attributes minus 1.
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