To support best execution and compliance, many of the largest issuers of consumer asset-backed securities (ABS) disclose VantageScore in their issuances.
When Synchrony, the nation’s fifth-largest consumer financing company with over 100 million consumer credit accounts nationwide, adopted VantageScore 4.0 for ABS transparency, it noted that VantageScore scores more U.S. consumers than FICO.
Since then, many of the largest consumer ABS issuers, including SoFi, Exeter, and others, have also chosen to disclose their use of VantageScore, not only because of compliance considerations, but also because it provides better performance and transparency, ultimately leading to smoother execution. It is estimated to generate over $20 billion in ABS issuance in 2025.
One of the key benefits is that the usage of VantageScore virtually eliminates the presence of unscored loans in an ABS pool. Unscored loans create uncertainty, which leads to the perception of increased risk. Some portfolios that are FICO-based have as much as 8-10% of the pool unscored, whereas VantageScore-based pools have less than 1% unscored.
“When we see loans in securitization pools that are unscored, we take a conservative approach and consider them poor credit quality. There could be significant advantages for issuers if they can reduce those,” said one Senior Director at a top bond rating agency.
Disclosure of VantageScore, when used in underwriting, is not only a regulatory concern, but it also serves as a safeguard that strengthens ABS issuer credibility, supports investor confidence, and facilitates smoother access to securitization markets.
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