Credit scores are a helpful tool for consumers navigating the financial services market, and it similarly allows lenders identify the potential risk of default for a borrower. That said, a common misunderstanding about credit scores is that the risk associated with any particular score is static when in fact the risk associated with a credit score changes over time.  

VantageScore’s RiskRatio helps provide useful context for lenders looking to mitigate risk in an ever-growing sea of data. VantageScore’s most recent update to RiskRatio highlights that in the first quarter of 2023, the 90+ days past due default rate ticked up more than 3% for subprime and near prime consumers* in originations compared to the prior quarter. Similarly, account management across all product categories increased by about 2% for the same consumer segments.  

In its Q1 update, RiskRatio also indicates the following: 

AUTO LOAN RISK INCREASING: RiskRatio indicates that there is a 3% increase in auto loan defaults for consumers with credit scores below 600. 

CARD ISSUERS TAKE NOTICE: There is a 5% increase in credit card defaults for consumers with credit scores below 600. 

RiskRatio, powered by VantageScore, is a first-of-its-kind tool that provides lenders and those in the capital markets the ability to refresh the relationship between credit scores and default levels (measured by delinquency of 90 days or more over a 24-month period) at different points in time for originations as well as existing accounts.  

To look at RiskRatio’s most recent findings, please visit https://vantagescore.com/lenders/risk-ratio/.