[hoggy1]

When looking at the IR01 chart (https://www.interestradar.com/scores" class="bbc_link" target="_blank">https://www.interestradar.com/scores) it say "The resulting number will be in the range from 330 (higher risk of default) to 409 (lower risk of default)". And discussion in a number of threads seem consistent with this statement. However when you lock at the loss rates for each grade and IR01 score, the AVG Loss's in the table appear to trend upwards with increasing IR01 scores. What am I not getting?

[Lovinglifestyle]

On my Portfolio Breakdown page, the progression is the way the directions state, but that lumps all the grades together for the score level.

Sometimes when I look at a low score loan I think it's getting penalized for not using credit very much, which is the opposite of the way I think.
At the high end of the score range, on the other hand, I can't go for some of the borrowers' high total debt amounts so I pass.

Thanks for pointing out the IR01 chart discrepancies.  Maybe I'm thinking ok within the grades, and my overall averages show that.  I don't feel secure enough with the scores to give up the thinking.

Have you looked at your Portfolio Breakdown?

[lascott]

https://forum.lendacademy.com/index.php?topic=3440.msg30620#msg88888888Quote"> from: hoggy1 on October 05, 2015, 05:15:19 PM

[Rob L]

Maybe it's because the number of notes used to compute the score is rather small. I see lascott posted the same while I was typing.
For my portfolio (mostly D's and E's, 14 months avg age) loss rate goes down as IR01 score goes up:
IR01               Nbr of notes          Loss Rate
330-379        390                          9.4%
380-389        984                          8.5%
390-399        3,384                       4.9%
400+              1,753                       4.9%

[TravelingPennies]

Scott,

You hold a lot of notes. Can you confirm Rob L's analysis of IR01 trend against loss rate?

[TravelingPennies]

https://forum.lendacademy.com/index.php?topic=3440.msg30650#msg88888888Quote"> from: hoggy1 on October 07, 2015, 08:14:07 AM

[TravelingPennies]

A clarification for those who are not IR subscribers. IR permits subscribers to upload their portfolio(s) for analysis. One method of analysis is for it to perform an IR01 ranking of each loan and provide results such as I posted above. It also has a risk analysis mode that compares the IR01 score with the interest rate. If the interest rate is too low in relationship to he IR01 score it flags loans as risky. Overall the IR01 scoring model seems to work quite well but I've never used it to purchase my notes. IR has been very useful to me in keeping track of my portfolios and I'm a big fan. IR is planned to be merged into BlueVestment so I'll have to wait and see how that works out for me.

[TravelingPennies]

This is my trend:

IR01          Notes      Ave Int Rate    Loss Rate    Ave Age
                                                                      (months)
330-379         925      23.00%           3.4%            14
380-389      1,578      21.18%           2.9%            14
390-399      3,766      18.03%           2.5%            14
400+          1,694      17.61%           1.9%            14
N/A               894      17.87%             .1%               2       (N/A means first payment is in the future)
Summary    8,857      19.01%           2.3%             12

The loss rate reflects recent sale of nearly all late notes, but the score related trend still goes straight down.

[TravelingPennies]

Thanks for that LL. Just what I was looking for. A statistically meaningful sample demonstrating IR01 predictive.

[TravelingPennies]

Reported as there is a link in that signature above. Scam-ish!