Brick 830

Brick-by-Brick: VantageScore's foundation

By: Barrett Burns
Date: July 15, 2020

More than any time in our company’s history, culture matters. Creating an environment that breeds creativity, innovation and openness is incredibly important to me even in the best of circumstances. When all your team members are working remotely, balancing the stresses of daily life during an unprecedented pandemic, and yes, even trying to take that summer vacation for that important down time, while sustaining the culture you envision becomes even more important to nurture.

I’m often asked about this topic and what sets VantageScore apart. This came up in a Q&A that I participated in that was published by FT Partners, which industry insiders know is the only investment bank that caters exclusively to the Fintech industry.

Previous interviewees have included Nigel Morris, Managing Partner & Co-Founder of the venture capital firm QED Investors and one of the founders of CapitalOne, and Adrian Nazari, founder and CEO of Credit Sesame, among many others. Certainly, I am in good company!

First of all, there is a great one-slide overview of who VantageScore is, where our model is used and how we’ve grown. Then there’s some questions I thought were really well thought out. I’ve excerpted some of them below. And you can read the entire interview here.


What was the vision behind founding VantageScore Solutions?

Prior to 2006, one credit score model developer dominated the marketplace. But we all know that competition makes markets more efficient and spurs on innovation and creativity.

And so with those truisms in mind, a group of data scientists from Equifax, Experian, and Transunion went to work on the first VantageScore model. They listened intently to their customers and built the model with three goals in mind:

  • Make credit scores more consistent across the three CRCs
  • Score more people and improve consumers’ access to sustainable credit
  • Achieve the highest predictive performance possible

While the marketplace and technology have changed significantly since then, we’ve always kept those goals top of mind when building new models.

Who are you direct customers and how does your economic model work?

Our business model is very unconventional. We don’t have customers. Rather, we license our models to Equifax, Experian and TransUnion, our three owners. They generate credit scores using their respective credit data, and sell the resulting scores to their customers.

We understand that their customers run the full spectrum of lender types. Large banks, smaller credit unions, credit card issuers, auto lenders, and fintech lenders are all users of our models.

A study conducted by Oliver Wyman, a management consulting firm, found that 12.3 billion VantageScore credit scores were used in the 12-month period between June 2018 and June 2019. Since June 2015, VantageScore usage has a 20% CAGR (compounded annual growth rate). You can read the full report on our website.

How is VantageScore different from FICO? Are your scores typically used on a standalone basis or in conjunction with other scores? What makes your scores so compelling?

We have a different model design than other model developers. As a result, our model can accurately and predictively score 40 million more consumers than other models. Using our model can help lenders get an early read on consumers that they might want to add to their portfolios. Two examples:

We’ve found that 24 million of those otherwise unscoreable consumers are infrequent users of credit (i.e., haven’t had credit activity within the last 6 months). However, many of these consumers will go in and out of the credit market – within 2 years, 16% of these consumers will have opened a new account.

We’ve also found that 1 million of the otherwise unscoreable consumers are new to credit (i.e., their oldest credit account is less than 6 months old). Within 2 years, nearly 60% of these consumers will open a new account.

About 10 million of the previously unscoreable consumers have credit scores above 620. We’ve also found that 2.4 million of these consumers are African-American or Hispanic.

2018 Unscoreables – All Scores

2018 Unscoreables – Scores 620+


40 million

10.06 million

Black and Hispanic

12.2 million

2.4 million


1.6 million

<1 million


25.7 million

7 million

Native American



Do you believe consumers are well equipped to understand their credit scores and know what steps to take to improve them? Are there any common mistakes you see consumers making? What is typically the best way for someone to improve their score?

Consumers still have a ways to go in understanding their credit scores. We conduct an annual survey that measures consumer knowledge of credit scores. Last year’s survey indicated that basic understanding of many of the fundamentals of credit scoring is declining.

We all collectively need to do a better job educating consumers about credit scores, which is why I am thankful to all the innovators out there who are providing consumers with their VantageScore credit scores for free, together with other critical resources and tools to provide the correct informational context.

Moreover, a recent study by Javelin, indicated that more than one-third of the subprime consumers (34%) who monitored their credit score between March 2018 and March 2019 were able to increase their score to a near prime or above credit risk tier.

In order to improve a credit score, it first starts with knowing your score. The next step would be to educate yourself using the reliable credit information available out there, so you can make informed decisions about how to manage your credit properly and also how to side-step common credit mistakes.

I am proud of the educational materials we share with lenders and other institutions. One of the cool things we did last year was to work with the Wall Street Journal to develop “The Credit Score Game,” which is featured on Tools like these, that gamify credit scoring, are really helpful to explain how certain financial decisions made by consumers can impact their credit score.

Please do read the rest of the interview if you have time. Additional questions relate to what other types of data could be used to develop credit score models and the challenges associated with being owned by three competitors in Equifax, Experian and TransUnion.

Lastly, as I write this, we’re seeing an unfortunate resurgence in COVID-19 cases. Nearly all our fall and likely winter meetings and conferences have either been cancelled or will be conducted virtually. I am saddened to see this, and I hope and pray we can all get back to some level of normalcy soon. I very much miss seeing all my friends and colleagues “out on the road.”

Until such time, please be safe and wishing you a healthy and happy summer.


Barrett Burns

CEO and President, VantageScore Solutions