The Single-Family Mortgage Industry & VantageScore

Open the door to more qualified applicants without lowering credit risk standards or pricing standards

The VantageScore model can uniquely improve a mortgage lender’s business while increasing responsible access to mortgage credit for consumers. By widening the window without lowering the bar in terms of credit risk standards or pricing standards, lenders can reach more qualified applicants.

Specific to the mortgage industry, the VantageScore 4.0 model provides a 2.6% performance improvement in account management and 2.1% lift in originations over a benchmark CRC credit score model.

  • More Potential Customers

    VantageScore allows lenders to accurately assess approximately 37 million more consumers than with other commercially available models. More than 13 million of these newly scored consumers are Prime or Near-Prime, and thus potentially eligible for mortgages.

  • More Consistent Scores

    With legacy models, credit scores can vary widely between the three credit bureaus. VantageScore minimizes this variance because the same algorithm is used at all three credit bureaus. VantageScore also uses characteristic leveling, a patented approach that no other model can emulate. It is the most consistent model across all three credit bureaus and the only true tri-bureau model in existence.

  • Strong Risk Management

    VantageScore is at the cutting edge of predictive power thanks in part to fresher, more granular data as well as the use of trended credit data and machine learning. No matter where on the credit curve an applicant may fall, VantageScore is a powerful tool to assess credit risk.

  • More Consumer-Friendly

    VantageScore has been proud to pioneer the use of rent, telecom, and utility data and the exclusion of paid collection accounts. These consumer-friendly features also help lenders by giving them a more complete and fairer picture of their customers’ creditworthiness.

What the Introduction of Credit Score Competition Means for Mortgage Lending

For many years, Fannie Mae and Freddie Mac, the Government-Sponsored Enterprises (GSEs) responsible for purchasing and securitizing the bulk of mortgages in the U.S., have been required to rely solely on one brand of now antiquated credit scoring models.

Credit score competition is coming to the mortgage industry

Thanks to new federal law and recent rulings by the Federal Housing Finance Administration (FHFA), we now have the potential to expand sustainable homeownership opportunities to millions of additional Americans who are currently disadvantaged by traditional credit scoring models.

How Competition Will Affect the Mortgage Market

The way we use credit has changed, but traditional credit scoring models have not adapted to these shifting behaviors. Model competition will result in more accurate, reliable, inclusive and updated mortgage credit scores.

Why is Competition Important?

VantageScore and other credit score model developers may now have an opportunity to bring more predictive and inclusive credit scores to the mortgage marketplace.

  • 21% of millennials have “thin files”, making it difficult for lenders to see them as strong borrowers and leading to more chance they won’t be granted credit.

Breakdown of Newly Scoreable Consumers

Emerging Borrower/ Young File Young to credit Consumers who have only credit accounts that are less than six months in age
Dormant Infrequent or rare users of credit Consumers who haven't had an update/reporting on their credit files in the past six months but have had updates more than six months ago
No Trades Have only external collections, public records and inquiries on their file Consumers who have no credit accounts but are scored based on external collections and public records on their file

Demographic Breakdown

Newly Scorable Scores 620+
Total 37 Million 13.03 Million
Black and Hispanic 10.73 Million 3.06 Million
Asian / Pacific Islander 1.43 Million <1 Million
White 24.24 Million 9.21 Million
Native American 305,274 89,287
  • Approximately 37 million more Americans can be scored by our models

  • 16% of newly scored Americans are African-American or Hispanic

Mortgage Industry Usage

There are sectors of the mortgage market where VantageScore may currently be used.

Portfolio Management

VantageScore credit scores are effective tools for monitoring the ongoing risk of mortgage portfolios.

Mortgage Backed Securities (MBS) Analysis

The VantageScore model is often used in loan-level valuation analyses for previously issued mortgage-backed securities.

Pilot VantageScore in the Mortgage Space

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