The Default Risk Index presents the most accurate way to use credit scores to evaluate and compare pools of loans. This free, interactive data series is published quarterly to the VantageScore website using data from TransUnion. Rather than use credit scores to directly gauge risk profile—a practice that is common but flawed—the DRI is derived using the probability of default tables that lie beneath each credit score. In a single number, the Default Risk Index summarizes the risk profile of new originations in a way that is mathematically accurate and consistent over time.
The interactive chart below illustrates the risk profile of consumer loans originated each quarter, with higher values representing riskier loans.
Hover over to view exact values per industry. Click on the key beneath the graph to suppress or display each industry.
The risk profile of new originations remained mostly stable in the fourth quarter. Mortgage lenders remained the most conservative: their DRI of 85, the lowest of all categories, represented a weighted average PD of only 99bps.
The dashboard below summarizes the total volume, risk profile, and Default Risk Index value for consumer loans originated last quarter.
|Total Originations||Probability of Default (weighted average)||Default Risk Index||DRI vs. Last Quarter||DRI vs. Same Quarter Last Year|
New card and auto loans showed marginally more conservative risk profiles than the previous quarter, while mortgage loans showed the opposite trend. Student loans were once again the outlier, where the seasonal pattern continued to bring low volumes and higher risk loans in the fourth quarter when compared to the fourth quarters of years past.
The interactive chart below illustrates the total volume of consumer loans originated each quarter. For bankcard loans, the values represent total credit limits originated during the quarter.
Hover over to view exact values per industry. Click on the key beneath the graph to suppress or display each industry, or click on any colored bar in the graph to view that industry by itself.
Origination volumes fell across the board, with card and auto originations falling 10% and 8%, respectively, relative to last quarter. The sharp reduction in student loan volumes was consistent with past seasonality.
VantageScore Solutions is the company that owns the intellectual property rights to the VantageScore credit scoring models. VantageScore is jointly owned by Equifax, Experian, and TransUnion. TransUnion is a global information solutions company that serves businesses and consumers in 33 countries worldwide.
The VantageScore DRI powered by TransUnion is wholly owned by VantageScore Solutions, and the TransUnion DRI Methodologies were created by TransUnion. Any use (altered or unaltered) of the DRI or TransUnion DRI Methodologies must be plainly marked as such, and must not be misrepresented as being the original version.