Methodology
The Global Credit Health Consumer Score (GCHCS) is a comprehensive index developed by Credit Garden, a Maestro AI Labs project, to measure and compare the health of consumer credit environments across every country in the world.
Credit Garden by Maestro AI Labs (www.maestrosai.com)
What the Score Measures
The GCHCS evaluates how well a country's financial ecosystem serves consumers who need access to credit. It answers the question: "If a consumer in this country needs a loan, how healthy is the environment for them to obtain fair, affordable, and sustainable credit?"
The score ranges from 0 to 100, mapped to letter ratings from AAA (exceptional) to F (failed). Higher scores indicate environments where consumers can access affordable credit, lending practices are fair, defaults are manageable, and financial institutions are well-regulated.
Scoring Dimensions
1. Credit Access & Inclusion 20% Weight
Measures how easily consumers can participate in the formal credit system.
- Financial Inclusion Rate — Percentage of adults with a bank account (World Bank Global Findex)
- Credit Bureau Coverage — Percentage of adults covered by a credit bureau or registry (World Bank Doing Business)
- Regulatory Quality — Strength of consumer lending regulations (World Bank Governance Indicators)
2. Lending Environment 20% Weight
Evaluates the fairness and sustainability of lending conditions.
- Real Lending Rate — Consumer lending rate adjusted for inflation; lower real rates indicate more affordable credit
- Interest Rate Spread — Gap between consumer lending rates and central bank rates; smaller spreads suggest less predatory pricing
- Non-Performing Loan Ratio — Percentage of loans in default; high NPL ratios signal systemic lending problems, predatory practices, or economic distress
3. Economic Stability 15% Weight
Assesses the macroeconomic conditions that affect credit health.
- Unemployment Rate — Lower unemployment supports loan repayment capacity (ILO/World Bank)
- Inflation Rate — Optimal around 2%; high inflation erodes purchasing power and drives up lending rates
- Currency Stability — Based on 5-year exchange rate volatility; unstable currencies make credit riskier
- Economic Growth — Real GDP growth rate; growing economies support healthier credit markets
4. Consumer Financial Health 15% Weight
Measures consumer-level financial resilience.
- Household Debt-to-GDP — Moderate levels (40-60%) indicate healthy credit usage; very high or very low ratios are suboptimal
- Financial Literacy — S&P Global FinLit Survey data; higher literacy means consumers make better borrowing decisions
- Income Inequality (Gini) — Lower inequality correlates with broader, more equitable credit access
5. Income & Affordability 15% Weight
Evaluates whether consumers can actually afford the credit available to them.
- Median Salary vs. Lending Costs — Ratio of median annual salary to average lending rate; higher ratios mean more affordable credit
- GDP per Capita (log-scaled) — A proxy for overall economic development and consumer purchasing power
- Consumer Confidence — Forward-looking indicator of consumer willingness to borrow and repay
6. Institutional Framework 15% Weight
Assesses the strength of institutions that support a healthy credit market.
- Sovereign Credit Rating — Converted from letter ratings to a 0-100 scale; reflects national creditworthiness and institutional strength
- Rule of Law — World Bank Governance Indicators; strong rule of law supports contract enforcement and creditor/debtor protections
- Regulatory Quality — Quality of government policies promoting private sector credit markets
Rating Scale
| Rating | Score Range | Description |
|---|
| AAA | 90 – 100 | Exceptional Credit Health — World-leading consumer credit environment |
| AA | 80 – 89 | Excellent Credit Health — Very strong consumer protections and access |
| A | 70 – 79 | Strong Credit Health — Well-developed credit markets with minor gaps |
| BBB | 60 – 69 | Good Credit Health — Functional credit system with improvement areas |
| BB | 50 – 59 | Adequate Credit Health — Basic credit infrastructure, notable gaps |
| B | 40 – 49 | Moderate Credit Health — Significant access and affordability challenges |
| CCC | 30 – 39 | Weak Credit Health — Limited credit access, high-cost borrowing |
| CC | 20 – 29 | Poor Credit Health — Severely restricted credit markets |
| C | 10 – 19 | Very Poor Credit Health — Minimal formal credit infrastructure |
| F | 0 – 9 | Failed Credit Health — Non-functional consumer credit system |
Why Credit Garden Data Matters
Traditional credit scores evaluate individual borrowers. The GCHCS evaluates entire credit ecosystems. This matters because:
- For consumers: Understanding your country's credit health helps you contextualize your own credit experience. A low country score means the system itself may be working against you, not just your personal finances.
- For lenders & investors: Country-level credit health scores help assess portfolio risk across geographies and identify markets with improving credit conditions.
- For policymakers: The dimensional breakdown identifies specific areas where policy intervention could improve credit access and affordability for citizens.
- For researchers: Longitudinal data (2015-2024) enables analysis of how credit health evolves in response to economic shocks, policy changes, and structural reforms.
Credit Garden's globally-calibrated ML model, combined with this macro-level country index, provides a complete picture of credit risk — from the individual borrower level up to the national economic environment.
Data Sources
🌎
World Bank Open Data
GDP per capita, GNI, unemployment rates, lending interest rates, non-performing loans, financial inclusion (Global Findex), Governance Indicators
data.worldbank.org
📈
International Monetary Fund (IMF)
World Economic Outlook, Financial Soundness Indicators, household debt data, inflation forecasts
imf.org/en/Data
💼
International Labour Organization (ILO)
Global unemployment statistics, employment-to-population ratios, labor market indicators
ilostat.ilo.org
📚
S&P Global Financial Literacy Survey
Financial literacy rates across 140+ countries, measuring understanding of risk diversification, inflation, numeracy, and compound interest
gflec.org
💰
Bank for International Settlements (BIS)
Household debt-to-GDP ratios, credit-to-GDP gaps, cross-border credit statistics
bis.org/statistics
⚖
World Bank Doing Business / B-READY
Credit bureau and credit registry coverage rates, legal rights index, business environment indicators
worldbank.org/en/businessready
🏢
National Central Banks & Statistical Offices
Country-specific consumer lending rates, credit card interest rates, household surveys
Various national sources aggregated
📊
Credit Rating Agencies
Sovereign credit ratings from S&P, Moody's, and Fitch, converted to numeric scores
Ratings as of each assessment year
Methodology Notes
- All data is normalized to 0-100 sub-scores using empirically determined global min/max bounds for each indicator.
- Where direct country data is unavailable, regional median imputation is used, flagged with lower confidence.
- The COVID-19 pandemic (2020-2021) created significant but temporary disruptions; our methodology captures these faithfully rather than smoothing them out.
- Scores are calculated independently for each year to enable meaningful year-over-year comparison.
- The algorithm is deterministic: the same inputs always produce the same score.
- Currency-denominated values are converted to USD using annual average exchange rates for each respective year.
© 2024 Credit Garden — A Project of Maestro AI Labs (www.maestrosai.com). All rights reserved. The Global Credit Health Consumer Score is provided for informational and research purposes. It does not constitute financial advice.