Appetite for Higher Yields Spurs Scorecard Revamp at CPS

A scorecard adjustment will be a top priority for Consumer Portfolio Services this year, after modifications adopted in August 2018 resulted in customers whose credit was better than expected, Chief Executive Charles Bradley Jr. told Auto Finance News.

The recent scorecard refinement pushed the lender’s portfolio mix up the credit spectrum — farther “than we even wanted,” Bradley said. Whereas many lenders seek higher credit quality borrowers, CPS has a different approach.

“We’d actually like our performance to get more yield-oriented, so we can make a little more money,” he said, adding that risk-mitigation tools are already in place to manage the lower credit quality loans CPS seeks.

“We beefed up our risk already, so now we can go down the scale to get a little more business,” he said. The company plans to implement gradual changes to the scorecard to find its sweet spot, so as to avoid dipping too low or reaching too high on the credit spectrum. “I bet no one says that: ‘We’re buying better than we want to,’” he added.

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