The new VantageScore 4.0 credit scoring model offers predictive performance lift across all credit industries, outperforming VantageScore 3.0 in all major credit categories, with significant predictive lift overall in loan originations and a 5.3 percent lift in mortgage originations. This is despite the current low-default risk credit cycle, in which VantageScore 3.0 (and most other credit scoring models) enjoy a high level of accuracy.
VantageScore 4.0 scores 30-35 million consumers* who cannot obtain credit scores when conventional scoring models are used. To further enhance the accuracy of scores assigned to this previously unscoreable population, VantageScore 4.0 scientists leveraged machine learning techniques in their development of scorecards for those with dormant credit histories (i.e., those with scoreable trades but with no update to their credit file in six months).
This has led to a performance lift of 16.6 percent and 12.5 percent in the bankcard and auto originations categories for consumers with dormant credit files, as compared with VantageScore 3.0.
* 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.