Probability of Default

Created by Katie Deverill, Modified on Wed, 19 Oct 2022 at 06:13 PM by Katie Deverill

The probability of default table is an analysis tool that helps set the internal acceptance criteria to assess company credit policy and risk.

The highlighted row has a cumulative score range of 41-100 and a score range of 41-45, which is used as an example below.

Cumulative Statistics

  • At the Rating of 41 and above, 87.8 percent of the accounts are accepted. 

  • Delinquency rate is 0.25 for the entire portfolio.

Rating Range Statistics

  • The rating range of 41-45 represents 7.8% of all accounts. 

  • The delinquency rate is 0.79% for this rating range. 

In this Rating range, there are 127 good companies for every delinquent company.




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