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%. As seen in Figure 1, in the unstressed economy of 2013-15, this would have aligned with a simple FICO® Score cut-off of 640 or higher. Economic Scenario.
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