Fair Lending Magic™ statistics includes a variety of tests pertinent to fair lending analysis. For example, the T-Test can be used to test for significant differences in pricing indicators between two groups. Disparate Impact involves a policy or practice, even when applied equally to all applicants, results in a negative effect on a prohibited basis group.

Below are the statistic tests available in Fair Lending Magic™.

• Average Values Summary
  Summary statistics that includes Mean, Max, Min, Standard Deviation for a selected field.
• T-Test
  T-Test statistic determines whether the means of two groups are statistically different from each other.
• Z-Test
  Z-Test statistic measures the proportions of two populations.
• Chi-Square
  Determines whether there is a significant difference between the expected frequencies and the observed frequencies in a category.
• Correlation
  Correlation measures the strength of a linear association between two variables.
• Logistic Regression
  A regression model used to predict an outcome (approve/deny) based on predictor variables (credit score, DTI, LTV, etc).
• OLS Regression
  Ordinary least squares (OLS) regression is a method for predicting a variable (APR) from the values of others (credit score, DTI, LTV, etc).

Below are the disparate impact tests available in Fair Lending Magic™.

• Underwriting Overlays
• Pricing Adjustment Incidence

See Also

• Entering Report Notes
• Underwriting Analysis
• Pricing Analysis