She urges investors to do the difficult work necessary to figure out how each lender approaches underwriting and to determine whether they take other factors into consideration besides just scores.
“As an investor it’s incumbent on you to do that deep credit work, which means you have to know as much as possible about how things should pay off or default,” she said. “If you don’t think you’re being paid for the risk, you have no business investing in it.”
This article was provided by Bloomberg News.