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By Premier Insights

In Fair Lending

Posted September 27, 2018

When to Use a T-score Versus a Z-score in Fair Lending Analysis


When is it appropriate to use a t-score rather than a z-score? Will the results of fair lending analysis change if I use one rather than the other? These common questions are addressed in this video, the third part of our series reviewing statistical concepts that are fundamental to fair lending analysis.

Z-scores and t-scores derive from z-distributions and t-distributions respectively. Understanding the distinctions between these two distributions is a prerequisite to understanding the intuition behind selecting the appropriate statistic.

This video provides a short, concise answer to when and why it is appropriate to use a t-score rather than a z-score.

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Premier Insights is an analytical and consulting firm specializing in econometric and statistical analysis for the banking industry, Fair Lending and CRA consulting, and other research and analytical services.

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