by Barrett Burns, President and CEO, VantageScore Solutions, LLC
Credit scores are designed to measure risk, specifically the risk that a consumer will default on a loan within 24 months. The realtionship between any given credit score and risk can change over time, particularly as economic conditions, such as the recent recession, influence the amount of risk present across the entire population.
Any successful strategy that employs credit scoring requires clear understanding the relationship between credit scores and risk, and smart monitoring and management of that relationship, through processes including regular score validation.
Read the full story here. (This links to a Mortgage Banking magazine website, where you can download a copy of the article.)