Probability of Default
Probability of default (PD) is used along with with "loss given default" (LDG) and "exposure at default" (EAD) in a variety of risk management models to estimate possible losses faced by lenders. Generally, the higher the default probability, the higher the interest rate the lender will charge the borrower to offset this risk. Creditors typically want a higher interest rate to compensate for bearing higher default risk.
In order to properly manage more risky tiers of loans, we deploy our analytical tools. Our proprietary analytics explore improvement targets within the loan portfolios to identify risks before they happen.
Our propriety software, extensive industry experience, and call center strategies will influence your probability of default. Not only will our processes decrease PD, but we will also return additional information for underwriting and loan distribution to manage the PD risk.