What is Vintage (cohort)?
Risk
A vintage groups loans originated in the same period to track their behavior over time. Comparing vintages shows whether lending policies are improving or deteriorating.
Why it matters
Total portfolio delinquency mixes old and new loans, so it can hide a recent problem or exaggerate one already solved. Vintage analysis isolates each origination period and shows the real quality of what is being approved today.
It is the metric that reveals whether a policy change worked, because it compares periods at the same age.
- Isolates the quality of each origination period.
- Shows the effect of a policy change over time.
- Prevents aggregate delinquency from hiding recent trends.
Common questions
What does an improving recent vintage indicate?+
That current origination policies are approving better than previous ones, comparing each vintage at the same maturity point.
Related terms
Affordability
Affordability is how much a person can put toward loan installments without compromising essential expenses. It is estimated from their income and existing obligations, and it defines the maximum reasonable amount to grant.
Alternative data
Alternative data are non-traditional information sources —transactional behavior, open banking, device data, telco or utilities— that complement the credit bureau to assess applicants with little or no history. They make it possible to lend to populations traditional scoring can't reach.
Champion/Challenger testing
Champion/Challenger is a technique for improving credit policies by routing a share of traffic to an alternative policy (the challenger) and comparing its performance against the one in production (the champion). It lets teams validate changes on real data at controlled risk before adopting them.
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