A survey commissioned by VantageScore Solutions found that U.S. consumers want to see a shift in the credit scoring industry from an industry dominated by one developer to a marketplace characterized by competition and innovation. The survey revealed that across the board, consumers consider the fact that they have multiple credit scores positively.
The phone survey, of a representative sampling of more than 1,000 consumers, reveals that the majority of U.S. consumers support newer methods of calculating credit scores and that most Americans also support competition among developers of credit scoring models. Survey respondents expressed approval for multiple features of modern credit scoring models, including recognition of positive payment histories for rent, utility, and telecomm bills.
The survey also explored the extent to which consumers may be positively impacted by credit scoring models that exclude paid third-party collection accounts. Approximately five percent of Americans report having a paid off collection account (an estimated 12 million), which are excluded from consideration in VantageScore 3.0., VantageScore Solutions’ latest credit scoring model.
“The results of this survey clearly demonstrate that consumers prefer competition in the credit scoring marketplace, and that they welcome important innovations VantageScore has delivered to a market that previously lacked the motivation to better serve lenders and consumers,” said Barrett Burns, president and CEO of VantageScore Solutions. “Our model provides a highly accurate credit score along with important benefits for consumers and lenders, which ultimately helps to match consumers to the right types of credit products and credit granters.”
Millennials cite being unscoreable as obstacle to credit access
The VantageScore survey oversampled the Millennial population to help industry participants better understand and serve their credit needs. Among the findings:
“Lenders and policy makers need to take notice that massive populations of Millennials fail to meet the minimum criteria associated with conventional credit scoring models, whereas many would be scoreable when updated models, such as the VantageScore 3.0 model, are employed,” added Burns. “These consumers are reachable, scoreable and can be made eligible for automated underwriting systems in a safe and sound manner. They are seeking credit products and credit cards in particular. Many are very attractive potential borrowers, and lenders using outdated credit scoring models are missing opportunities to win their business and their loyalty.”
Survey results are available via an infographic that is posted on VantageScore Solutions’ website.
The survey was conducted by FTI Consulting and commissioned by VantageScore Solutions. Survey questions were delivered via telephone. The audiences included a national sample of 1,000 U.S. adults over the age of 18 and an additional oversample of Millennials (ages 18 – 34). The survey was fielded between July 28 and August 16, 2015.
About VantageScore Solutions
VantageScore Solutions, LLC (www.vantagescore.com) is the independently managed company that owns the intellectual property rights to the VantageScore credit scoring models, including the VantageScore 3.0 model. VantageScore 3.0 has the capacity to score 30 – 35 million consumers who were previously unscoreable. Initially developed by America’s three national credit reporting companies — Equifax, Experian and TransUnion — VantageScore Solutions’ highly predictive models use an innovative, patented and patent-pending tri-bureau scoring methodology that provides lenders and consumers with more consistent credit scores across all three CRCs. In 2014, nearly one billion VantageScore credit scores were used by over 2,000 lenders and other industry participants, including six of the ten largest banks.