Absolute Expected Loss
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Product Overview
Look Around Corners
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How We Help You Meet New Guidelines
FASB Current Expected Credit Loss (CECL) has new standards for understanding and provisioning Expected Loss (EL) but doesn't prescribe a specific model.
A simple, precise, and quantitatively sound methodology to meet EL standards is the Probability of Default (PD)/Loss Given Default (LGD) methodology. The simplicity of this quantitative methodology is the conceptual framework of the solution.
The Equifax AbsolutePD® Model employs statistical techniques to estimate likelihood of default providing predictions based on borrower-by-borrower payment histories.
Equifax’s Absolute Expected Loss Model is comprised of three independently developed underlying models. This forward-looking model provides a bottom-up approach based upon the basic foundation of EL as the product of PD and LGD.
Key Benefits
A structured decisioning framework
Spot troubled accounts
Tackle risk earlier
Complement your collections efforts
Know where your risk is
Quantitative precision for CECL
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Avoid the "too little, too late" approach to risk, by taking more informed action earlier.