factors/scorecard score to PDs estimated from the Agency Direct model. This approach works well where there is a large, co-rated dataset but a small sample of internal defaults--e.g. Insurance portfolio
* External vendor model: Use of models such as MKMV EDF model with credit cycle indices.

At this point, to determine a TTC PD, one follows three steps:
* Converting the PIT PD to PIT DD
* Subtracting the credit cycle index from the PIT DD, thereby obtaining the TTC DD; and
* Converting the TTC DD to TTC PD.