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Notes to the Financial Statements
Ford Motor Company | 2010 Annual Report 103
NOTE 7. FINANCE RECEIVABLES (Continued)
Aging. For all classes of finance receivables, Ford Credit defines "past due" as any payment, including principal and
interest, that has not been collected and is at least 31 days past the contractual due date. The aging analysis of Ford
Credit's finance receivables balances at December 31, 2010 was as follows (in millions):
31
3131
31-
---60
60 60
60
Days Past
Days Past Days Past
Days Past
Due
DueDue
Due
61
6161
61-
---90
90 90
90
Days Past
Days Past Days Past
Days Past
Due
Due Due
Due
91
9191
91-
---120
120 120
120
Days Past
Days Past Days Past
Days Past
Due
DueDue
Due
Greater
Greater Greater
Greater
Than 120
Than 120 Than 120
Than 120
Days
DaysDays
Days
Total Past
Total Past Total Past
Total Past
Due
DueDue
Due
Current
CurrentCurrent
Current
Total
Total Total
Total
Financ
FinancFinanc
Finance
eee
Receivables
ReceivablesReceivables
Receivables
North America
North AmericaNorth America
North America
Co
CoCo
Consumer:
nsumer:nsumer:
nsumer:
Retail ................................
................................
$ 820 $ 87 $ 32 $ 82 $ 1,021 $ 36,528
$ 37,549
Direct financing leases
................................
2 — — — 2 15
17
Non
NonNon
Non-
---consumer:
consumer:consumer:
consumer:
Wholesale................................
................................
15 — — 4 19 13,254
13,273
Dealer loans................................
................................
20 — — 29 49 1,068
1,117
Other................................
................................
— — — — — 738
738
Sub-total ................................
................................
857 87 32 115 1,091 51,603
52,694
International
InternationalInternational
International
Consumer:
Consumer:Consumer:
Consumer:
Retail ................................
................................
86 38 22 19 165 8,982
9,147
Direct financing leases
................................
15 7 3 3 28 2,899
2,927
Non
NonNon
Non-
---consumer:
consumer:consumer:
consumer:
Wholesale................................
................................
3 — 1 — 4 8,847
8,851
Dealer loans................................
................................
— — — — — 33
33
Other................................
................................
— — — — — 390
390
Sub-total ................................
................................
104 45 26 22 197 21,151
21,348
Total recorded investment in
finance receivables
................................
$ 961 $ 132 $ 58 $ 137 $ 1,288 $ 72,754
$ 74,042
Consumer Credit Quality. When originating all classes of consumer finance receivables, Ford Credit uses a
proprietary scoring system that measures the credit quality of the related receivables using several factors, such as credit
bureau information, consumer credit risk scores (e.g., FICO score), customer characteristics, and contract characteristics.
In addition to its proprietary scoring system, Ford Credit considers other individual consumer factors, such as employment
history, financial stability, and capacity to pay.
Subsequent to origination, Ford Credit reviews the credit quality of retail and direct financing lease receivables based
on customer payment activity. As each customer develops a payment history, Ford Credit uses an internally developed
behavioral scoring model to assist in determining the best collection strategies. Based on data from this scoring model,
contracts are categorized by collection risk. Ford Credit's collection models evaluate several factors, including origination
characteristics, updated credit bureau data, and payment patterns. These models allow for more focused collection
activity on higher risk accounts and are used to refine Ford Credit's risk-based staffing model to ensure collection
resources are aligned with portfolio risk.
Credit quality ratings for Ford Credit's consumer finance receivables are categorized as follows:
• Pass – receivables that are current to 60 days past due
• Special Mention – receivables 61 to 120 days past due and in aggressive collection status
• Substandard – receivables greater than 120 days past due and for which the uncollectible portion of the
receivables have already been charged-off, as measured using the fair value of the collateral