Risk Analysis Commons^™

Fico® Scores Through The Economic Cycle And Understanding Consumer Sensitivities To Economic Fluctuations, Gerald Fahner

SDSU Data Science Symposium

FICO® Scores assess default likelihood under “normal” conditions. Additional risk emanates from economic variability and manifests itself in changes to the score distribution as well as changes to the Odds-to-Score relationship. In this session we will examine credit bureau data from the Great Recession in the United States as compared to a stable economic period. We’ll share a framework that provides new and actionable insights into consumers’ sensitivities to such economic fluctuations such as:

• Application of counterfactual analysis, machine learning, and scorecards, to rank-order consumers’ sensitivities

• Consumer segmentation by economic sensitivities

• Sensitivity profiling reveals interesting differences between the most and …

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