Mastering Unsecured Lending Risk: A Must-Read for Every Credit Risk Professional

As a fellow risk practitioner, my standards for books on risk management, specifically credit risk management, are high, and Frank Tian’s second edition of his popular book Unsecured Lending Risk Management has exceeded my expectations.

This book appeals to practitioners, novices, and curious readers alike. It’s well-written with clarity and fluidity. Frank takes readers through the entire borrower lifecycle, from acquisitions to collections, addressing the fundamentals of risk management at every stage.

Origination is the lifeblood of any lender. Whether you're operating an installment loan fintech or managing a credit card portfolio at a full-service bank, Frank covers all aspects of risk assessment to help onboard the most qualified clients.

He dives into the nuances of direct mail versus online leads and highlights the importance of a holistic approach to risk management—one that involves collaboration between risk, technology, and finance. He warns against viewing marketing solely through the lens of a single department, emphasizing that true success comes from a coordinated effort, not just in conversion rates but also in long-term profitability.

For seasoned risk practitioners specializing in either installment loans or credit cards, this book provides invaluable insights into both worlds. Frank outlines key metrics, performance indicators, and strategic differences between the two.

I especially enjoyed the chapters dedicated to Credit Line Increase and Credit Line Decrease strategies. These often-overlooked tactics are crucial to the success of any credit card portfolio, and Frank makes them more relevant than ever. His use of examples throughout the book brings these concepts to life, demonstrating how even the smallest strategy changes can significantly impact both installment and credit card portfolios.

Frank’s deep dive into collections strategy is another standout. He lays out well-defined, battle-tested collection and contact strategies, offering a comprehensive guide to building a strong, foundational collections team. Even after years in risk management, I found myself learning something new in every chapter.

Now, as I focus on building a software platform to help risk professionals manage data, strategies, rules, policies, and testing, the chapters on risk infrastructure, data systems, and decisioning platforms resonated with me. The traditional, labor-intensive approach to building risk infrastructure is evolving. Today, even those with minimal technical expertise can develop credit risk management rules, test strategies, integrate third-party data, and implement risk models—all without writing a single line of code.

Frank’s credit risk acumen is phenomenal, and his ability to explain complex concepts through examples and analogies makes this book one of the best I’ve encountered. Every risk management professional should have it in their arsenal, and newcomers to the field should read it twice.

If you’d like to get a copy, visit Frank’s website at https://risk-school.thinkific.com/. He’s also putting together a masterclass if you’re interested, join the waitlist. For those eager to dive in now, the digital edition is available.

Lastly, I want to thank Frank Tian for his incredible generosity in sending me a signed copy of his book. I will treasure it forever.

—Tim