It may sound incongruous, but today’s advanced credit scoring technologies allow lenders to expand their universe of applicants, more accurately predict default, and segment consumers more effectively. VantageScore ushered in a new era for credit scoring and remains best in class.
VantageScore delivers critical functions that credit risk managers need in today’s lending environment:
This is why market adoption of the VantageScore model is surging: Over 6 billion VantageScore credit scores were used in 2015 by over 2,000 lenders and other industry participants — including 7 of the 10 largest banks.
To learn more about the transformative predictive ability and market expansion opportunity provided by VantageScore, review our annual validation information.
* Reduction in public records and collection trade lines in consumers files will cause the number of consumers who would be newly scoreable using the VantageScore credit scoring model to decline.
As demographics shift and borrower behaviors change, credit decisioning must evolve in parallel.
VantageScore was developed using 45 million credit files, more than any other model, enabling robust sampling, for both consumers with conventional borrowing behaviors and those with less common behavior patterns. More granular credit file data allowed designers to model attributes that more accurately reflect the post-recession lending environment.
The model also is able to incorporate rent, telecom, and utility payment data when that data resides in a consumer’s credit file. By relying on FCRA-compliant data that only resides in consumer credit files, risk managers can shed concerns about governance and examination risk.
The VantageScore model features innovative segmentation design and 13 different scorecards, including three dedicated to consumers with sparse credit file data. The VantageScore model can generate highly accurate credit scores for 98 percent of consumers with credit files.
This achieves a larger scorable population and maintains predictiveness without lowering credit standards:
Conventional wisdom, reinforced by conventional models, held that a credit scoring model could not achieve a market-leading level of predictiveness and still score more people. VantageScore’s unconventional scientists challenged those assumptions. By leveraging sophisticated data and innovative modeling techniques, they developed models that score the previously unscorable because those consumers used credit differently than conventional consumers. VantageScore models do so accurately and fairly, satisfying both risk-management and fair-lending criteria.