Myths and misconceptions about the VantageScore model and credit scores in general have existed and been perpetuated over time. Clearing up these myths is important for the industry as well as for consumers.
Myth: The VantageScore model’s approach to scoring those with more sparse credit files is analytically unsound.
Reality: VantageScore 3.0 is validated each year using a randomized sample of 4.5 million credit files. The strong results of these annual validations are available on VantageScore’s public website. The model demonstrates strong rank ordering for its entire scoreable universe, including a Gini coefficient of 52 for its new-scoring population (Gini coefficients of 45 or greater are considered a good result). A study of first payment default rates demonstrated that scores generated for new-scoring consumers were well-aligned with the broader population in every score band with a sufficient sample size.
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