Finding Creditworthy Consumers in a Changing Economic Climate
Tags: Decision Analytics, Risk Management
As lenders consider how to move beyond recession-based management strategies, this study looks at how leveraging methods using VantageScore in conjunction with consumer credit behaviors can effectively identify profitable opportunities.
Credit quality deteriorated across the credit spectrum during the recession that began in December, 2007. As the recession winds down, lenders must strategically target creditworthy consumer segments for lending opportunities, while avoiding those segments where consumer credit quality could continue to slip. Credit scoring remains an obvious and primary gauge of prospective performance. Heightened risk management focus, however, calls for a more in-depth analysis. A hidden momentum or trajectory in the consumer?s environment can serve as a useful barometer of future performance by the borrower when combined with the credit score.