Critics Corner

Advancing Policy and Understanding Criticism

As an industry leader, VantageScore advances innovation—and influences public policy—to provide much needed reform in credit-score model development. We take time to find common ground to support an agenda that serves consumers, lenders, and the financial market as a whole.

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Medical Debt

How does medical debt impact consumer credit scores?


It is critical for lenders to have a clear understanding of a person’s debt obligations as well as that person’s history of paying those obligations back. An area that has received attention from a wide range of stakeholders is whether that should include debt and collection accounts stemming from medical needs.

Sources: Wall Street Journal, January 5, 2022


Medical accounts are different from other consumer debt because they often arise from unforeseen circumstances or complicated, opaque insurance and healthcare provider billing practices. These types of debts and collections that have been paid off are not predictive of a consumer’s creditworthiness.

The three nationwide credit reporting agencies, Equifax, Experian and TransUnion, announced they will remove nearly 70% of medical collection debt tradelines from consumer credit reports, a step taken after months of industry research. Effective July 1, 2022,

  • Paid medical collection debt will no longer be included on consumer credit reports.
  • The time period before unpaid medical collection debt would appear on a consumer’s report will be increased from 6 months to one year, giving consumers more time to work with insurance and/or healthcare providers to address their debt before it is reported on their credit file.
  • In the first half of 2023, Equifax, Experian and TransUnion will also no longer include medical collection debt under at least $500 on credit reports.

Sources: New York Times, March 18, 2022

How VantageScore Has Historically Treated Medical Debt and Collections:

  • Eliminated all paid collections, including all medical collection accounts, in 2013 with the introduction of VantageScore 3.0.
  • All VantageScore models ignore medical debt when it is reported by a medical facility.
  • When an unpaid medical collection account does appear on a consumer’s credit report, it has a less negative impact on a consumer credit score) - by up to approximately 24 points – as compared to the impact of an unpaid non-medical collection account (e.g., credit card, auto) based on the VantageScore 4.0 algorithm.
  • While the specific score impact with vary and depend on a person’s particular credit profile, VantageScore 4.0’s treatment can lessen a medical collection account’s impact by up to approximately 24 points.

Credit Report Errors

Are errors in people's credit reports causing them difficulties accessing credit?


The CFPB has received some 800,000 credit or credit reporting complaints. Their data also indicates that disputes with the credit reporting industry are more common among those in minority neighborhoods.

Sources:, January 5, 2022, Washington Post, January 7, 2022

The Consumer Data Industry Association, which represents the credit reporting companies points to credit-repair firms as a major contributor to the issue, saying that, “The CFPB report highlights trends including increased activity by certain credit-repair companies, which can inflate complaint numbers and undermine the process of addressing legitimate requests.”

Sources: CDIA, January 5, 2022

Financial Inclusion

Are credit-scoring models excluding consumers or are they increasing access to credit?


Credit-scoring models have been criticized for having a disproportionately negative impact on minority borrowers in the United States. In turn, this has made it challenging for these borrowers to break a perpetual cycle of high fees that leads to delinquency.

Sources: The Washington Post, February 17, 2022, 

By providing a fair and accurate credit score to a broader population, VantageScore creates opportunities for lenders to extend credit safely and soundly to consumers historically underserved by legacy processes.

Recently Experian and global consulting firm Oliver Wyman examined this issue and found that, “because today’s scoring system leans heavily on a person’s credit history to generate a credit score, it leaves out large segments of the United States population from accessing credit.”

Sources:, February 7, 2022

Racial Wealth Gap

Is the racial wealth gap in America getting wider and is access to mortgage finance a possible solution?


According to the Brookings Institute, the net worth of a typical white family is nearly 10 times greater than that of a Black family in 2016. Known as the “Racial Wealth Gap,” it has been widening despite decades of prosperity in the United States.

Sources: Brookings Institute, February 27, 2020

Home ownership may hold the keys to solving this issue according to many experts, except that there is a racial housing gap as well: there is 30-point gap between Black and White homeownership rate.

"Homeownership is a massive driver of household wealth, so you can't have a conversation about closing the racial equity gap that doesn't focus on housing," said Andy Winkler, housing and infrastructure projects director at the Bipartisan Policy Center, a nonprofit policy organization.

Sources:, January 31, 2022

Algorithmic Bias

Because many algorithms used by financial institutions are based on historical data, are they biased against those traditional underserved?


Across many different industries, algorithms are used to make decisions because of their efficiency and ability to remove any human biases. That said, algorithms are not free of bias and in the credit-decisioning industry, we must be extremely careful to not allow how underserved populations were treated in the past to drive algorithms used now and in the future.

“This is how structural racism works,” said Chi Chi Wu, a staff attorney at the National Consumer Law Center. “This is how racism gets embedded into institutions and policies and practices with absolutely no animus at all.”

Sources: Brookings Institute, October 21, 2021, The Markup, August 25, 2021

The following is an excerpt from an article citing VantageScore as a alternative to algorithms that advocates have argued are biased:

"Potentially fairer credit models have existed for years. A recent study by Vantage Score—a credit model developed by the “Big Three” credit bureaus to compete with FICO—estimated that its model would provide credit to 37 million Americans who have no scores under FICO models. Almost a third of them would be Black or Latino."

VantageScore offered the following statement on this issue on February 18, 2022:

“As a leading national credit score used by over 2,200 financial institutions, we have been a pioneer in eliminating algorithmic bias in credit. We support all initiatives, like NFHA’s framework, that seek to end discrimination in housing. In particular it is critical to move away from certain legacy processes and certain scoring models that have been proven to ignore underserved borrowers and communities of color. We have led the way in producing fairer credit outcomes by incorporating alternative data and novel analytics techniques,” said Silvio Tavares, President and CEO of VantageScore."

Sources: National Mortgage News, February 18, 2022