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Vintage analysis: how to read a vintage curve
A portfolio-level delinquency rate can look stable while the quality of new lending slips. Vintage analysis separates the two. It follows each month's disbursals as a group, a cohort, and tracks how each group performs as it ages.
The idea
Group loans by the month they were disbursed. For each group, measure the share that has gone bad at 3, 6, 9, 12 months on book (MOB). Plot one line per group. Lines that sit higher mean worse cohorts.
What you need to decide first
- The bad definition. For example 90+ DPD at any time, or 60+ at month-end. Use the same one for every cohort.
- Count or balance, and whether balance means original or current.
- Cumulative 'ever bad' or point-in-time bad. Cumulative never falls, which makes curves easy to compare.
- How to treat loans that closed early.
A small illustrative table
| Cohort | MOB 3 | MOB 6 | MOB 9 | MOB 12 |
|---|---|---|---|---|
| Jan | 0.4% | 1.6% | 2.5% | 3.1% |
| Feb | 0.5% | 1.7% | 2.6% | 3.2% |
| Mar | 0.9% | 2.8% | 4.1% | - |
| Apr | 1.0% | 3.0% | - | - |
These figures are made up for illustration. The pattern is real: March and April are worse than January and February at the same age. Something changed at origination, and you can see it at MOB 3, long before the portfolio rate moves.
What to look for
- A cohort that departs from its neighbours early.
- A change that lines up with a policy change, a new channel, a new cut-off or a new partner.
- Curves that flatten. Most loss shows up in a typical window, and your own history tells you when.
Common mistakes
- Comparing cohorts at different ages. Always compare at the same MOB.
- Changing the bad definition part-way.
- Reading young cohorts too hard. A cohort at MOB 3 has little data. Give it a range, not a verdict.
Try it on your own tables
The free tools give you the prompt, the checks and how to present the result. You enter table names only.
See the free toolsFrequently asked questions
What is vintage analysis?
A method that groups loans by origination month and tracks the performance of each group as it ages, so you can compare the quality of lending across periods.
What does MOB mean?
Months on book: the number of months since the loan was disbursed.
How is vintage analysis different from roll rate analysis?
Roll rates look at movement between buckets across the whole book from one month to the next. Vintage analysis follows each origination cohort over its life.
Keep reading
Roll rate analysis: how to read a roll-rate matrix
A roll-rate matrix shows where loans in each bucket end up next month. Learn to build one, read it, and use it to forecast how many loans reach 90+.
BenchmarksGross NPA vs bureau 90+: why the numbers never match
Gross NPA ratio and a credit-bureau 90+ rate look like the same thing. They are not. Learn the six reasons they differ before you compare them.