Ford vs ferrari and credit score competition

Ford vs. Ferrari and Credit Score Competition

Date: June 22, 2020

Happy 2020! I hope you enjoyed a festive holiday season.

Over the holidays, I watched the movie Ford vs. Ferrari, a true underdog story about how the Ford Motor Company took on racing leader Ferrari in the 1960s to revolutionize the racing world and elevate the Ford brand. [Full disclosure: I’m a bit of a car nut and, as some of you might know, previously served as executive vice president of Global Risk Management at Ford Motor Credit Company.]

A little history: Back in the 1960s, the Ford Motor Company was a dying brand, chugging out cars that no one was buying. To reinvigorate the brand, Ford tried to buy Ferrari; however, the plan backfired when Ferrari refused to be bought by a company that made “ugly little cars.”

In retaliation, Henry Ford II decided to build his own racing car to compete in the grueling 24-hour Le Mans (the most prestigious race at the time) and against Ferrari – a competition that everyone thought they’d lose, since Ferrari had won the race seven years in a row. However, once Ford tasked Carroll Shelby, a racer-turned-automotive designer (and for whom the Shelby Mustang is named), to custom-build a faster, better-performing race car, Ford did the unthinkable and won three years in a row. In doing so, Ford became a force to be reckoned with.

Shelby’s grandson said the following in a New York Times interview about his grandfather and that first race:

“You can never discount the underdog. If you have the right circumstances and set of people, David can beat Goliath.”

Okay, so what does this have to do with credit scoring?

Thirteen years ago, when VantageScore first started for the purpose of introducing competition into the marketplace so that more consumers could gain access to mainstream credit, our company was met with similar criticism and doubt. Could we take on an industry dominated by one “Goliath”? Could we make a better credit scoring model? In time and with the right team in place, we proved to be a formidable competitor that was indeed capable of building the most advanced credit scoring model in the industry, under what seemed insurmountable odds – without compromising accuracy.

But we didn’t stop there. To this day, we continue to advance our industry, and we remain steadfast and resolute toward that mission.

A testament to this effort is a quick recap of our 2019 “wins”:

  • VantageScore credit score market adoption climbed to 12.3 BILLION, a close second (and closing in!) to FICO’s usage and a consecutive 20% increase each year since 2015. 2,500 organizations now use VantageScore, including 2,200 financial institutions.
  • After years of working closely with policy-makers, market participants and consumer activists, VantageScore earned a seat at the table in the mortgage market thanks to a ruling by the FHFA that requires GSEs (Fannie and Freddie) to allow credit score competition in the mortgage market.
  • As you will see in one of this newsletter’s articles, we covered major ground with consumers via successful social media engagement efforts that put us in the lead in terms of Facebook followers amongst comparable companies, and a newly minted premier partnership with that already has garnered hundreds of thousands of views on YouTube.

As you can see, a lot can happen in a year. And as we embark on this new decade, our goal at VantageScore is to maintain this momentum, shift into high gear and continue to prove skeptics wrong.

Barrett Burns

CEO and President, VantageScore Solutions