What does the ABS market need to know?

FICO can help.

What does the ABS market need to know? FICO can help.
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Welcome to the FICO® Score ABS Portal

For participants in the Secondary Market, gain free access to FICO materials.

  • Thought leadership white papers
  • Best practice education materials
  • And more

FICO® Scores were solely cited as the credit risk measure in over 98.8% of total dollars in U.S. Securitizations.*

*Mercator Advisory Group Asset Back Securitization Study for credit card and auto loans and leases in 2018.


FICO® Resilience Index

Helping you understand consumer resilience so you can vest confidently in good times and bad.


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FICO® Resilience Index 2 Benchmarking Resources: Mortgage Industry

The 2021 U.S. mortgage borrower resilience benchmarks based on FICO® Resilience Index 2 provide a valuable point of reference for lenders, investors and other mortgage industry stakeholders to understand how borrower resilience is trending and how it varies across different FICO® Score tiers. Generated from a nationally representative sample of U.S. borrowers in April 2021, the benchmarks help lenders and investors answer, “How does our portfolio resilience compare to industry averages?” and “Where do we have pockets of ‘economic stress risk’ that may warrant closer examination?”

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FICO® Resilience Index 2 Industry Benchmarking Resources: Auto Finance Industry

The 2021 U.S. auto loan borrower resilience benchmarks based on FICO® Resilience Index 2 provide a valuable point of reference for lenders and ABS investors to understand how borrower resilience is trending and how it varies across different FICO® Score tiers. Generated from a nationally representative sample of U.S. borrowers in April 2021, the benchmarks help lenders and investors answer, “How does this portfolio’s resilience compare to industry averages?” and “Where do we have pockets of ‘economic stress risk’ that may warrant closer examination?”

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A Tale of Two Portfolios: How resilience profiles can benefit the RMBS market

Nearly all public residential mortgage-backed securities (RMBS) prospectuses disclose FICO® Score information, providing a consistent measure of underlying portfolio credit risk that allows stakeholders to compare the quality of similar portfolios or vintages over time. With the introduction of the FICO® Resilience Index, RMBS issuers and investors can gain additional insight about portfolio risk under stress. The FICO Resilience Index is a new analytic designed to rank-order consumer resilience to economic stress. It differentiates and rank-orders “latent” credit risk that may manifest during economic downturns, offering a powerful complement to the FICO® Score for deeper credit risk insights and more refined consumer decisions.

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A Tale of Two Portfolios: How resilience profiles can benefit the auto ABS market

Nearly all public asset-backed securities (ABS) prospectuses disclose FICO® Score information, providing a consistent measure of underlying portfolio credit risk that allows stakeholders to compare the quality of similar portfolios or vintages over time. With the introduction of the FICO® Resilience Index, ABS issuers and investors can gain additional insight about portfolio risk under stress. The FICO Resilience Index is a new analytic designed to rank-order consumer resilience to economic stress. It differentiates and rank-orders “latent” credit risk that may manifest during economic downturns, offering a powerful complement to the FICO® Score for deeper credit risk insights and more refined consumer decisions.

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Measuring Consumer Resilience to Economic Stress for ABS

FICO® Scores are designed to rank-order the expected future payment performance of consumers’ credit obligations based on their credit bureau characteristics, irrespective of the economic environment. Investors may calibrate FICO Scores based on their own loan portfolios’ recent performance to predict the odds of satisfactory payment performance.

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New Data Underscores Strong Performance of the FICO® Resilience Index

Recent loan accommodation requests correlated to FICO Resilience Index values

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Mercator Advisory Group 2020 Report

Read this full report from Mercator Advisory Group covering the FICO®Resilience Index.

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Economic Impacts of a Moratorium on Consumer Credit Reporting

A credit reporting moratorium would severely restrict credit to millions of consumers, with potentially disproportionate impacts on lower-income, minority, and first-time homebuyer borrowers while significantly delaying the timing, speed and trajectory of economic recovery. Learn more here.

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FICO Resilience Index: A New Tool for More Precise Lending, Risk Management and Housing Policy

We examine eight use cases for FICO® Resilience Index within the home mortgage industry. From capital planning to risk management to housing policy, the additional information provided by the index helps the industry improve their analytics to create more finely targeted strategies.

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FICO® Resilience Index

FICO® Resilience Index can help financial institutions more precisely predict a borrower’s resilience to potential future economic disruptions. This allows financial institutions to discover and manage potential latent risk within groups of consumers bearing similar FICO® Scores, without cutting off access to credit for resilient consumers. FICO Resilience Index leverages traditional consumer credit data and is designed to rank-order consumers by their sensitivity to a future economic downturn, offering a simple, powerful complement to the FICO Score for an array of use cases.

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Average US FICO® Score Ticks Up to 706

The latest data is in, and the average US FICO® Score now sits at 706. Since bottoming out at 686 in Oct 2009, there have been nine consecutive years of increases in the national average FICO Score.

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The Freedom of Fair Competition

Fair competition in credit scoring can foster innovation and expand the population of scored consumers. However, the credit bureaus’ ownership of Vantage Score creates anti-competitive incentives that may ultimately harm both borrowers and lenders. With the Federal Housing Finance Agency considering comments on its Notice of Proposed Rulemaking regarding the Validation and Approval of Credit Score Models, this issue should interest anyone concerned about the safety and soundness of the $6.7 trillion con-forming mortgage market. Read the article to learn more about this important policy issue.

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Are FICO Scores “Artificially Inflated?”

A recent Bloomberg article asserted that “consumer credit scores have been artificially inflated over the past decade,” as credit scores have steadily increased over the past decade of economic expansion. The conclusion cited is that “debtors are riskier than their scores indicate because the metrics don’t account for the robust economy, skewing perception of borrowers’ ability to pay bills on time”. So are FICO® Scores “artificially inflated?” The simple answer is no.

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Asset-Backed Securities: A Primer for Credit Card Managers

Mercator Advisory Group 2019 Report

Read this full report from Mercator Advisory Group covering the inception of ABS trading to the great recession to what’s on the horizon for the secondary market.

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Homecourt Disadvantage: Truncation Bias and the Art of Comparing Consumer Credit Scoring Models

Generally available consumer credit scoring models can provide great value to lenders in evaluating the risk of loan applicants. These models are designed to distill the predictive power of a large number of consumer factors into a single, easily understood score. While the credit scoring models work well in estimating default likelihood over time, all models eventually may need to be evaluated to determine if an update to the existing model is needed, or whether the existing model should be replaced by a new credit score model. However, these evaluations can be challenging. The white paper will cover credit scoring fundamentals and provide a deep dive on the cause and effect of truncation bias and ways to mitigate.

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To Score or Not to Score

According to studies by the Federal Reserve and others, the widespread adoption of credit scoring by financial institutions over the last 25 years has made credit available and affordable to more people than ever before. Credit scores have enabled financial institutions to more precisely measure credit risk, and as a result, there has been a democratization of credit in the US.

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Consumer Credit Score Migration

If investors aren't receiving updated account management scores frequently enough, they run the risk of making decisions with stale information. FICO® Scores provide a holistic view of the consumer's credit behaviors — tipping investors off to deterioration in a consumer's credit profile that may not have yet shown up in repayment performance.

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Machine Learning

Every day, new technology innovations are hatched in incubators, corporate research labs, universities and government institutions. But no matter where it originates, successful new technology follows a predictable evolution, migrating over time from nascence to mainstream maturity. In the world of credit risk assessment, machine learning (ML) is one of these technologies.

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FICO® Score 9, is the most current and predictive FICO® Score to date that maintains the same odds-to-score relationship for ease of migration and acceptance. The adoption by hundreds of lenders confirms the predictive power of FICO® Score 9 and the benefits for the market to drive smarter decisions.

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FICO® Score 9 Release Notes

Experian
Equifax
TransUnion

 

 

Get FICO® Score Release Notes from each credit bureau, including FICO 9 and prior versions.

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