BOSTON, Feb. 26, 2019 /PRNewswire-PRWeb/ -- New research from Mercator Advisory Group found that in the United States, FICO® Scores are disclosed in 97.5% of asset-backed securitizations, and 98.8% percent of consumer backed ABS portfolio value.* In addition, Mercator found 100% of Trusts collateralized with auto leases, auto prime and subprime, and timeshares use FICO® Scores to depict asset quality.
"As consumer credit of all types is on the rise, FICO® Scores remain a vital tool in the lending and securitization market, as evidenced by the fact that the vast majority of securitization disclosures include FICO Scores to help investors assess the credit risk of the trust," said Brian Riley, director at Mercator Advisory Group's Credit Advisory Service. "Our study found only three asset-backed deals did not use a FICO® Score to assess collateral quality –demonstrating that FICO® Scores continue to be the primary source for evaluating asset-backed risk."
Credit scores help enable financial institutions to make quick, often real-time acquisition decisions and credit quality assessments as borrowers transact as well as maintain their accounts. Credit scores can also help investors make decisions with the same confidence offered to the financial institutions underwriting, servicing, and bearing the credit risk. Mercator Advisory Group reviewed 2018 securitizations and examined how each securitization leveraged a credit score. Once it was determined whether the securitized instrument used a credit score, Mercator audited the report to determine if the FICO® Score or any other credit score was referenced. Key findings are as follows:
- FICO® Scores were solely cited in all auto financing transactions
- 95.95% of credit card securitization as measured by dollar amount, use the FICO Score
- 95.87% of the Trusts evaluated rely on FICO® Scores in unsecured consumer loans
For more insights around scoring and this study, visit us online at http://www.mercatoradvisorygroup.com.
Contact: For more information and media inquiries, please contact Karen Yetter, Mercator Advisory Group at 781-419-1700 or via email at media (at) mercatoradvisorygroup (dot) com.
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About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.
*Mercator Advisory Group performed a review of 2018 Asset-Backed Securitizations (ABS) across six asset classes: Auto Leases; Auto Loans (Prime); Auto Loans (Subprime); Consumer Loans; Credit Cards; and Residential Timeshares.
SOURCE Mercator Advisory Group
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