This week, Yahoo! Finance covered the push among lenders to use unconventional scores as they seek to broaden the pool of creditworthy applicants and include potentially overlooked borrowers. The article highlights VantageScore’s most recent market adoption statistics as reported in a recent press release. The study cited in the article, conducted by Charles River Associates, found that VantageScore usage grew year-over-year across both financial and non-financial institutions.
Last year, lenders pulled more than 19 billion VantageScore credit scores — which use credit behaviors and trended data — in their application processes, an increase of 30% over 2021, according to a new analysis. That included banks, fintechs, and other financial institutions, which relied on 9 billion scores last year, up 46% from the previous year.
The Yahoo! Finance article cited how many more borrowers are scored by VantageScore:
Using alternative data to measure a borrower’s creditworthiness can expand the pool of qualified borrowers. For instance, nearly 33 million more US adults were newly scoreable last year under the VantageScore 4.0 credit score. The tri-bureau scoring model from TransUnion, Experian, and Equifax uses trended data that considers the trajectory of credit behavior — is it improving or deteriorating — when scoring consumers.
Read more here: https://finance.yahoo.com/news/lenders-turn-to-nontraditional-credit-scores-to-find-more-borrowers-153015373.html