  Performance period determination and bad definition for credit scorecard has
been a mix of fortune for the typical data modeler. The lack of literature on
these matters led to a proliferation of approaches and techniques to solve the
problems. However, the most commonly accepted approach involves subjective
interpretations of the performance period and bad definition as well as being
chicken and egg problem. These complications result in poorly developed credit
scorecard with minimal benefits to the banks. In this paper, we will be
recommending a simple and effective approach to resolve these issues.
