In order to estimate probability of default, banks and other financial institutions have often used logistic regression based on data involving credit history.
Suppose an entrepreneur or borrower with little credit or business history goes to a bank or some financial institution to borrow money.
Banks can use, as an alternative to a credit or business history, 'psychometric' or 'behavioural' tests. Hence, the bank will use some psychometric data, instead or with credit history data when using logistic regression to estimate probability of default.
How can Bayesian inference improve upon such logistic regression wherein psychometric data is used?
Anyone know any other literature out there?