Credit investor

The investor can look further into the matter by examining the same
sort of detail considered for changes in payment rates. However, in this
case, the question is not what will cause borrowers to slow down repayment,
but cease it all together? As with all forms of default, it is a matter
of willingness and ability to pay. Though ability to repay (liquidity)
is not captured as a credit card variable, a proxy exists for willingness in
the distribution of the portfolio’s credit scores.
It is worth emphasizing one more time, however, that this simulation
assumes zero excess spread and no reserve account. In a more realistic
scenario, the monthly excess spread would dampen the accumulation of
losses by absorbing monthly loss fluctuations out