Addressing Portfolio Risk in Economic Uncertainty: Part 2 (2022)
FICO Blog
DECEMBER 8, 2022
Assume an auto finance portfolio’s current underwriting risk management strategy requires applicants to have an expected 24-month default rate less than 3%. However, in the stressed economy of 2007-9, this would have aligned with a FICO Score cut-off of 720 or higher. Cells are highlighted where the expected default rate is below 3%.
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