We're all aware that 2021 brings with it a certain degree of economic uncertainty. It's critical that you are equipped to evaluate and balance your portfolios to accommodate rapidly changing conditions quickly, efficiently, and responsibly.

In order to more accurately set your ALLL reserves for your Q4 2020 Call Report, I recommend you consider FICO® Resilience Index (FRI). The FRI is an analytic tool designed to complement the industry-standard FICO® Score and can be added to your Portfolio Review at no cost.

The FICO® Resilience Index gives you a refined tool to help identify those consumers in your portfolio that have a higher resilience during an unexpected economic disruption. For instance, higher-resilience consumers tend to have:

  • Fewer credit inquiries in the last year
  • Fewer active accounts
  • Lower total revolving balances
  • More experience managing credit

Conversely, the FRI scale helps you better identify less resilient consumers so that you can adequately increase loan loss allowance estimates.

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