Capital Markets Usage of VantageScore
Asset-Backed Securities (ABS)
Issuers are increasingly using VantageScore in their operations and are communicating the relative credit-profile distribution of securitized pools to rating agencies and investors alike. A market adoption study conducted by Oliver Wyman in 2019 found that 2,200 lenders (including nine out of 10 of the largest banks) use VantageScore in their processes.
Companies have used VantageScore in the credit-ratings assignment process without adverse implications by the Nationally Recognized Statistical Ratings Organizations (NRSRO, often referred to as rating agencies) for related asset-backed securities.
Residential Mortgage-Backed Securities (RMBS)
To accurately analyze risk, market participants can leverage the power of VantageScore credit-score data to assess private-label RMBS (also known as PLMBS).
VantageScore credit scores, which are refreshed monthly, allow credit performance to be tracked more precisely, in real-time, versus relying solely on credit scores calculated at the time of origination. This allows for more accurate, ongoing assessments of a residential mortgage borrower’s risk profile and, in turn, better portfolio management.