Financial Inclusion
Data Analytics Innovation Drives Financial Inclusion
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.
All VantageScore credit-scoring models score more than conventional credit-scoring models by using new data analytics technologies to generate predictive scores for three groups of consumers commonly left without a conventional credit score.
| Category | Conventional Models | VantageScore 4.0 |
|---|---|---|
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Dormant Infrequent credit use; consumers who haven't had updates to their credit files in the past 6 months but have earlier updates. |
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No Credit Accounts Consumers who have no credit accounts (also called tradelines), but do have external collections and public records on their file. |
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Young File Consumers with a short credit history (also called young to credit); consumers who only have credit accounts (tradelines) that are less than 6 months old. |
Many consumers who are newly scoreable with VantageScore 4.0 are from underserved groups, and a large proportion have scores 620 or higher.
Newly Scorable Consumers
| Newly Scorable | Scores 620+ | |
|---|---|---|
| Total | 37 Million | 13.03 Million |
| Black and Hispanic | 10.73 Million | 3.06 Million |
| Asian / Pacific Islander | 1.43 Million | <1 Million |
| White | 24.24 Million | 9.21 Million |
| Native American | 305,274 | 89,287 |
VantageScore research shows that in addition to minorities, there is an increased percentage of newly scoreables in:
- Lower income populations
- Communities with low home-ownership rates
- Communities with limited access to brick-and-mortar banking services
Inclusivity PLUS Accuracy
To score dormant, no trade and young file consumers, VantageScore uses cutting-edge machine learning techniques. The model used, VantageScore 4.0, ensures scores generated for newly scored consumers are as accurate as for conventional consumers.
As a result, the meaning of the score, in terms of the level of risk it implies, is consistent regardless of which group a consumer belongs to.
Impact of Expanding Scoreable Population Across the U.S.
