STAMFORD, Conn., October 24, 2016 – VantageScore Solutions, LLC, developer of the VantageScore® credit scoring model, today announced an increase of nearly 40 percent in annual usage of its credit scores, to more than eight billion scores for the 12-month period from July 2015 through June 2016.
The volume attests to significant growth over the comparable period in 2014-15, when lenders and other industry participants used more than six billion VantageScore credit scores. In 2013-14, roughly three billion VantageScore scores were used. Annual usage data is compiled in a survey conducted by an outside agent on VantageScore Solutions’ behalf.
“Over eight billion scores in one year is a testament to lender recognition of the VantageScore model’s predictive power, its superior consistency across all three credit bureaus, and the model’s ability to accurately score more consumers than any other generic credit scoring model, without lowering credit standards,” said Barrett Burns, president and CEO of VantageScore Solutions, LLC. “We are also proud that tens of millions of consumers receive VantageScore credit scores free, thanks to a growing number of direct-to-consumer subscription services using the same VantageScore model that lenders use. Monitoring VantageScore credit scores will be an important step for many consumers who seek greater awareness of their credit health and good credit habits.”
The survey found that the number of lenders and other industry participants using the VantageScore model grew to more than 2,400 over the 12-month period, up from more than 2,000. VantageScore users now include 20 of the nation’s 25 largest financial institutions. Consumer lenders use credit scores for many different purposes, including marketing, underwriting, pricing, portfolio management, model building, testing and validation.
Use of VantageScore credit scores has surged despite the ongoing exclusion from the mortgage sector. Current policies require all loans submitted for purchase by Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) responsible for securitizing the vast majority of all U.S. single-family mortgages, to include a credit score calculated using an outdated credit scoring model developed by VantageScore’s chief competitor. VantageScore continues to work with industry participants including lenders, advocacy groups, regulators and legislators to correct this virtual monopoly and to facilitate competition among credit-score developers in the mortgage market to the benefit of consumers, lenders, investors, the GSEs and taxpayers.
Data was compiled by polling the three national credit reporting companies (CRCs)—Equifax, Experian and TransUnion—to determine the number of VantageScore credit scores used by their respective customers. The CRCs are the only licensees of the VantageScore credit scoring model, and they compete with each other when selling credit scores. VantageScore Solutions engages an outside agent to compile aggregate usage information on its behalf.