Implementing a New Credit Score in Lender Strategies (UPDATED STUDY)


Date: October 28, 2020


UPDATED for 2020

At first, the process of converting strategies to use newscores can seem overwhelmingly complex. Generic riskscores have become deeply embedded within strategiesand often strategy design is contingent upon the scoreperformance. In reality, there is just one central question that must beanswered for successfully converting a strategy to use anew credit score:

What is the value of the new score (NewScore) that represents the same default rate orpopulation volume designated by the previous score(OldScore)?

All conversion processes revolve around answering this question and essentially follow the same steps. The analytic and resource requirement for each step in the conversionprocess is determined by the complexity and magnitude ofthe specific strategy. Furthermore, the process must befollowed when converting from one version of a score to anew version or converting from one brand of score toanother brand.

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