Experian has released CreditHorizons for Whole Loan Portfolios, a method of portfolio valuation that uses consumer credit data, credit risk scores and predictive attributes for forecasting future loan performance.
‘Experian Capital Markets' CreditHorizons for Whole Loan Portfolios adds a new level of transparency by linking individual borrower behavior to expected loan performance,’ says Ethan Klemperer, general manager and senior vice president, Experian Capital Markets. ‘This additional insight will improve the value analysis of performing and nonperforming loans, and facilitate dynamic credit risk monitoring within whole-loan pools.’
Credit attributes tested and identified by Experian improve upon default models, the company says, enabling users to make informed decisions about asset value. Credit card utilization rates are among the credit attributes that CreditHorizons considers, Klemperer explains.
‘Borrowers who exhibit high credit card utilization are 27 times more likely to default on their mortgages within the subsequent three months," he says.