88%Public lending data
Risk or mix?
of the rise in early default sat in one loan size band
- What was observed
- Early default rose from 4.56% to 7.04% between two years of lending.
- What a generic approach says
- Borrowers are getting riskier: tighten the scorecard.
- What the engine read
- 88% of the rise sat in loans of $4,000 to $10,000, which grew from 36.4% to 47.9% of the book. Within them, borrowers scoring 660 to 699 grew from 18.5% to 31.9%.
- What it meant for the decision
- The rise was mostly a shift in mix. The response belongs in who is lent to.