VantageScore 4.0 uses proprietary machine learning techniques to develop scorecards for consumers with limited credit histories. These consumers are not scored by other conventional models, which require a consumer to have a minimum of six months of credit history in their credit file, or an update to their credit file at least once every six months.

VantageScore is an independent joint venture of the three Nationwide Consumer Reporting Agencies (NCRAs): Equifax, Experian and TransUnion. VantageScore Solutions, LLC is the independently managed company that holds the intellectual property rights to VantageScore.

More than 3,400 companies used 27 billion VantageScore credit scores between January and December 2023, according to a report conducted by Charles River Associates. Eight of the top 10 U.S. banks, and 30 of the top 50 banks use VantageScore credit scores. Usage of VantageScore is widespread across loan types. The top 10 card issuers accounted for approximately 78% of the usage of VantageScore credit scores among card issuers.

Please reference our 2024 Market Adoption Study.

Stronger Predictive Performance

VantageScore is at the cutting edge of predictive data analytics insights, thanks to its sophisticated model architecture and innovative use of data. The VantageScore 4.0 model includes the use of trended credit data and machine learning to drive predictive performance. VantageScore provides more precise decision making, enabling more credit application approvals while reducing potential defaults.

Score More People

VantageScore allows lenders to assess approximately 33 million more consumers than other conventional credit scoring models. More than 10 million of these newly scored consumers have scores of 620 and above, making them potentially eligible for mortgages.

Closing the Homeownership Gap

Home equity is the lifeblood of wealth creation in the U.S. economy. With VantageScore, lenders can reach approximately 10 million more borrowers with credit scores above 620. By providing mortgage finance opportunities to underserved but creditworthy borrowers, lenders can begin to address the widening homeownership gap in America.

More Consumer-Friendly

VantageScore has been proud to pioneer the use of rental, telecom, and utility data and the exclusion of medical collection accounts in credit scoring models. These consumer-friendly features also help lenders by giving them a clearer, more comprehensive picture of the creditworthiness of their borrowers.

For more information, see Our Models, Key Benefits, and VantageScore 4.0.

When reported to the three nationwide consumer reporting agencies (NCRAs), all VantageScore models use rent and utility payment information in the calculation of a person’s credit score. By using this data, our models increase the amount and variety of information used to assess a person’s creditworthiness.

For more information, see our white paper on advantage of adding rent and utility data.

VantageScore constantly reviews model performance and publishes an annual assessment of our models. Our last assessment demonstrated that VantageScore 4.0 outperforms prior versions of VantageScore models as well as other benchmark NCRA scoring models within Originations and Account Management. This performance is observed overall as well as across all major product categories, including Bankcard, Auto, Mortgage and Personal Installment Loans. See the most recent assessment here: 2023 VantageScore Model Assessment.

If you need help with an earlier model version, your credit bureau relationship manager can provide you with performance data. If you need help getting in touch with a credit bureau, please complete the contact form below and a VantageScore team member will help you find the right people to speak with.

VantageScore models feature advanced segmentation and model building techniques. These signature techniques result in meaningful filtering of consumers, giving lenders the ability to optimize credit decisions from account acquisition through the customer life cycle.

Increasingly, lenders have chosen to switch to using VantageScore 4.0 and subsequent models to underwrite and manage their customer portfolios.

VantageScore regularly reviews model performance and publishes an annual assessment of our models. Our annual reviews include an assessment of statistical bias. To test for equal treatment, VantageScore conducts formal statistical tests based on anonymized historical data sets to determine if consumers with similar scores have similar default rates. These tests are performed on all VantageScore model versions and demonstrate that there is no statistical bias in VantageScore credit scores with respect to any protected groups.

The VantageScore 4.0 model counts inquiries that appear in your credit file within a 14-day window as a single inquiry. This ensures that consumers who are shopping around for a favorable rate are not treated as if they are applying for multiple credit products.

Data scientists at VantageScore use machine learning to closely examine the credit histories of consumers often overlooked by lenders due to lack of credit history. Machine learning—a type of artificial intelligence that lets computers learn from data, identify patterns and automatically make decisions—was used to research predictive data relationships between these consumers, which resulted in a static model that can assign a predictive score for 94% of the adult population.

VantageScore 4.0 was developed using consumer behavior data from 2014 to 2016. VantageScore obtained 15 million anonymized consumer credit files from each of the three nationwide consumer reporting agencies (45 million in total), and assessed the data to identify whether borrowers ultimately defaulted within 24 months.

VantageScore’s data science teams developed rich data attributes from the credit file and assessed the information for its ability to predict default.

Finally, we used the most powerful attributes to segment the consumer base and combined to calculate a credit score that ranks consumers by probability of default.

The VantageScore model looks at consumer behavior across six categories: payment history, utilization, age and mix of credit, new credit, balances and available credit. Each category’s contribution to the overall score is determined by assessing how particular behavior has impacted the rate of default. VantageScore creates educational material to help consumers understand the impact of their behavior. Lenders or other prospective model users can review our model white paper.

A tri-bureau is a single model that operates on consumer credit data at all three nationwide consumer reporting agencies, or credit bureaus.

VantageScore’s patented characteristic-leveling process considers data records from each bureau more consistently than conventional credit scoring models, despite differences in the ways those records are stored. This process results in an unsurpassed ability to align credit scores across all three bureaus. Score consistency is tested annually as part of our model performance assessment.

VantageScore model users, and prospective users, can obtain odds charts that list the observed relationship between VantageScore credit scores and probability of default from their credit bureau relationship manager. If you need help, please complete the contact form below and a VantageScore team member will help you contact the right relationship manager.

As of July 2022, medical collections that are paid or are younger than one year were removed from credit files. In May 2023 the nationwide consumer reporting agencies (NCRAs) removed medical collections with an original amount of less than $500. In order to reflect these changes, VantageScore stopped using medical debt or medical collection information in the calculation of VantageScore 4.0 credit scores in January 2023.

VantageScore performed thorough analysis around the impact on model predictive performance and consumers. Given minimal effects on predictive performance and benefits to borrowers, VantageScore decided to remove all medical collections from the VantageScore 4.0 calculations. This decision has been widely supported and the White House has signaled that it intends to remove medical debt from use in all federally granted loan products.

For more information, see our White Paper on medical debt and the changes to VantageScore.

VantageScore 4.0 is routinely used as the primary credit score to help establish the risk of the offerings – approximately $4.3 billion to date. The largest number of offerings occurred in 2020 and 2021, representing $1.6 billion in total deals backed by a VantageScore 4.0 brought to market. 2021 to 2022 saw a significant increase size of deals that included VantageScore 4.0, with $2.8 billion in ABS offerings going to market.

For more information on capital markets, see the latest research study conducted by FTI here.

Since its launch in 2006, VantageScore has achieved widespread recognition within the regulatory community. Regulators have explicitly stated that choice in the credit score marketplace should be protected.

VantageScore has achieved recognition with each of the following Federal Regulators:

• Office of the Comptroller of the Currency
• Federal Housing Finance Agency
• National Credit Union Administration
• Federal Reserve Board
• U.S. Department of Housing and Urban Affairs
• Federal Housing Agency
• Federal Trade Commission
• Consumer Financial Protection Bureau

Annual market adoption studies confirm that VantageScore credit scores continue to be used across the entire lifecycle of consumer lending and across every relevant category.

The most recent report indicated that in the 12-month period between January and December 2023, over 3,400 companies used 27 billion VantageScore credit scores. This represents a 42% increase in the number of scores when compared to a similar 2023 study.

More information from the VantageScore 2023 market adoption study is available here.

For more information on capital markets, see the latest research study conducted by FTI here.

VantageScore commissioned FTI Consulting to do a study into the use of credit scores in the capital markets. The study revealed that participants welcomed credit score competition and are open to use a range of methods to assess portfolio credit quality. A full copy of the report is available here: FTI Consulting Research.

Lenders and other organizations interested in using VantageScore credit scoring models should speak with their credit bureau relationship manager at Equifax, Experian or TransUnion. If you need help getting in touch with a relationship manager, complete the contact form below and a VantageScore team member will be in touch to help you .

Organizations that want to share the VantageScore credit score with their customers should follow the VantageScore brand guidelines. A copy of the guidelines can be obtained from your credit bureau relationship manager. If you need help getting in touch with a credit bureau then please complete the contact form below and a VantageScore team member will help you find the right people to speak with.

Lenders often work with their credit bureau partners to assess the impact of changing credit scoring model before they complete a migration. VantageScore has published white papers and fact sheets describing common strategies that lenders follow when they change credit scoring models: Lender Strategies.

To learn more about migrating to VantageScore 4.0 and best practices when using a new credit score, download the VantageScore migration playbook. Interested in discussing migration? Contact us.

VantageScore has a number of tools that market participants will find helpful to understand the power and potential of VantageScore 4.0.

The first is Inclusion360®, the groundbreaking, open access, and interactive analytics platform that uses comprehensive data sets to uncover previously underserved consumers by geographic market. Inclusion360 data helps consumer credit-industry stakeholders gain insight needed to reach creditworthy consumers in communities that conventional credit scores may not include.

RiskRatio™ is a tool that provides lenders and those in the capital markets the ability to view and refresh the relationship between credit scores and default rates (measured by delinquency of 90 days or more over 24 months period) at different points in time for originations, as well as for existing accounts. This information provides stakeholders important insights to help manage their portfolio risk.

For example, by using the tool, stakeholders can see that consumers in the VantageScore Near Prime (621-640) credit score band had a 55% decrease in default risk when comparing the sample population from March 2009 (stress period) to March 2020 over the 24-monthperformance window in each time period.

CreditGauge™ provides critical insights including the U.S. consumer average VantageScore® credit score, as well as key consumer credit metrics that underpin the VantageScore® credit scoring model such as delinquencies, balance-to-loan ratios, and new account openings. Consumer credit trends are provided at a national level as well as by generation, income levels and loan types (e.g., credit card, personal loans, auto loans and mortgages).

MarketGain™ is a leading-edge analysis that provides data and insights to lenders and fintechs about increasing their addressable market through the implementation of VantageScore 4.0.

VantageScore maintains a public list of all reason codes on a purpose-built website, reasoncode.org, to help consumers understand how they can improve their credit scores.

Model users can get a full list of model reason codes and the model user guide from their credit bureau relationship manager. If you need help getting in touch with a relationship manager, complete the contact form below and a VantageScore team member will help you.