Direct Default

Definition

Direct Default is a type of Delinquency profile and eventual Credit Event where the borrower (typically in Consumer Finance context) migrates into a defaulted state without any apparent attempt (by borrower and/or lender) to remedy the deteriorating delinquency status

In the context of a Roll Rates analysis, direct defaults are paths that exhibit direct progression from current to defaulted status, without any prior journey away from the current state. Accounts that do exhibit direct default give rise to a non-zero Cure Rate

See Also

• Early Payment Default