Mahdi Goldani - Assistant Professor of Economics, Hakim Sabzevari University
Mohammadreza Ghanbari - Department of Mathematical Sciences, Sharif University of Technology

Nowadays, a major concern of banking systems is managing the credit risk of their customers.According to Basel definition of the credit risk, it is the risk of default on a debt that may arisefrom a borrower who failed to make required payments. As a general view of credit riskmodels, they are divided into two categories: Credit Scoring and Credit Rating Models. Incredit scoring, bank measures the credit risk of each customer and according to its value,decides whether to lend them a specific interest rate or not. But as the majority of bank assets,which is making the portfolio of their loans, the models in credit portfolio management or Credit Rating models, are considered. Credit rating models are not as long time as creditscoring one and most of them developed after 1990. In this paper five basic methods that usedin credit rating models are discussed in four sections: I) Introducing, II) Framework ofmethod, III) Limitation of method and IV) Related works in Iran. And at last it is concludedthat CPV and KMV methods are used more than others.

Credit risk, credit portfolio modeling, Credit Scoring, default risk